Mr. Arnold Dillon:

There are the obvious inflationary pressures in the first order, which is before we get into the consumer reaction. These pressures are obviously having an acute effect on every business operating in this country but retail is no different to that. Energy and transport costs are a significant factor in overheads. There is pressure right throughout the supply chain. While we do not engage with members on price and market-sensitive issues, one only needs to look at the data from the Central Statistics Office that suggest prices increases have clearly moved through the supply chain. From a groceries perspective, the objective of members is to try to limit the impact of that inflationary pressure on their consumers. It is a very competitive market out there, and businesses are anxious to ensure they retain their market share in that context also.

There is also the wider issue of consumer spending and how it will be affected. We have line of sight on a whole category of retail rather than just grocery retail. Some elements are much more exposed to discretionary spending than others. Some are a little bit more insulated. There is a definitely a concern that there will be a fall-off in the discretionary spending that goes into certain parts of retail. If the cost-of-living squeeze continues, there will obviously be an impact as everyone tightens their belt a little bit more. Needless to say, that will feed into all operators in the market.