Ireland's Retail Economy 2022

The Consumer Price Index is designed to measure price change in the cost of consumer goods and services. It measures the change in the average level of prices (inclusive of all indirect taxes) paid for consumer goods and services by all private and institutional households in the country and by foreign tourists holidaying in Ireland. Approximately 53,000 prices are collected for a representative basket consisting of 615 items during the week containing the second Tuesday of each month up to and including the third Tuesday of each month.

Percentage expenditure weights used for the 1922 and 2022 Consumer Price Index

Table 8.1a shows the basket of goods and services and related expenditure weights used to calculate the Consumer Price Index (CPI) in 1922. These weights were based on data collected by the Ministry of Economic Affairs during the summer of 1922. This work was carried out by sending 5,000 forms for the collection of Household Budgets to National School teachers in every school in the country who then distributed the forms to wage-earning households. Only 308 completed budgets, from 112 towns, were returned. These Household Budget forms asked the householder to detail the quantities and costs of all food consumed during the previous seven days in addition to expenditure on fuel and light, household requisites and other sundry items such as cigarettes. For the year ending June 1922 the householders were also asked to give (1) the cost of all clothing purchased, (2) the cost of materials purchased for clothing, and (3) the cost of making-up clothes.

Table 8.1b shows the basket of goods and services and related expenditure weights used to calculate the Consumer Price Index in 2022. The sum of the weights adds to 100.0%. The weights are based on data collected by the CSO in the Household Budget Survey 2015-2016 and these weights are updated annually at CPI COICOP class (4-digit) level using information on consumer expenditure from National Accounts Household Final Monetary Consumption Expenditure (HFMCE).

Consumption in 1922 vs 2022 – 100 years of change

The basket of goods and services used for 2022 is very different to that used for 1922. There is much more variety in the items covered in 2022. For example, items which are included in the 2022 basket and which did not appear or exist in the 1922 basket include alcohol, mortgage interest, health, recreation and culture, education, and restaurants and hotels.

These percentage expenditure weights tell us that just over 57% of average household expenditure was on food and non-alcoholic beverage in 1922, compared to 11.4% in 2022. In 1922, 17.5% of household expenditure was on clothing and footwear compared to 4.7% in 2022. Almost all (87%) of average household spending in 1922 was on food, clothing, rent and fuel & light compared with 28.4% in 2022.

Cost of Living in Ireland and United Kingdom in 1922

Figure 8.2 shows the weights used in the Irish CPI in 1922, the corresponding weights used in the UK at that time, and the weights used by Ireland 100 years later. The weights are reflective of each period in question. For example, the total number of cars in Ireland in 1915 was just 9,850, compared to 2,215,127 private cars in 2020. As incomes were lower and the range of goods and services available to choose from was much more limited back in 1922, the purchase of staple items tended to use up the greater part of the disposable income. There were no supermarkets and people instead relied on local shops for their provisions. Food, clothing, shelter, and heat were the main motivators. Consumer choice and preferences have changed dramatically over the past 100 years. The growth in home ownership, motor cars, domestic and international travel, telecommunications, technology, the growth in services, increased choice and range of goods, and of course the development of retail in all its formats.

Consumer Price Index (All Items)

The Consumer Price Index (CPI) rose by 8.2% between December 2021 and December 2022, down from an annual increase of 8.9% in the 12 months to November 2022 This was the fifteenth straight month where the annual increase in the CPI has been at least 5.0%.

Consumer Price Index (Divisions)

The divisions with the largest increases in the year to December were Housing, Water, Electricity, Gas & Other Fuels (+25.9%) and Food & Non-Alcoholic Beverages (+11.7%). Education (-7.1%) and Miscellaneous Goods & Services (-0.4%) were the only divisions to show a decrease when compared with December 2021.