The price of some food, clothing and consumer products is likely to increase by between 15 and 20 per cent, if the weakness of the pound against sterling and other currencies continues, leading importers have warned.
While books and magazines have already been subject to a price rise, cars and petrol are less likely to be affected in the short term, importers have said.
Large retailers are waiting for their January sales to end before taking decisions on what items might be subject to increases.
The weakness of the pound will push up the price of imports from Britain in pound terms. While most importers buy sterling two or three months ahead, many of these arrangements are now coming to an end. Importers who bought sterling in late October, for example, would have got 89p to the pound, while the Irish currency is now worth around 85p sterling.
"We will hold out as long as we can, but we simply cannot carry a 10-15 per cent drop in the currency against sterling for very much longer," said the general manager at Clery's, Mr Tom Rea.
He said the Dublin department store was looking at a 15 to 20 per cent price increase. Mr Martin Fitzpatrick, financial controller at DID Electric, said some of the company's suppliers had absorbed currency losses, but could not do this indefinitely. "The weakness against sterling and the deutschmark means that prices for most of the main electrical brands are adversely affected," said Mr Fitzpatrick.
He added that the company's prices are set to go up in February, by between at least 6 to 8 per cent.
One of the worst hit sectors so far has been the book trade. The manager of Waterstones, Ms Anne Griffin, said although some suppliers are giving parity, there has been an increase overall of about 15 per cent.
This has led to an increased workload for staff as books need relabeling and payments have to be re-calculated. She pointed out that 85 per cent of the shops stock has to be imported from Britain.
Even though the shop keeps pace with the exchange rate, they are normally one or two weeks behind it. This has led to a short-term absorption of costs, she added.
A spokeswoman for the music retailers, HMV, said that suppliers of CDs and tapes had absorbed much of the losses resulting from the weak pound, but this was not likely to continue for much longer. A spokesman for ESSO refused to speculate on what might happen to petrol prices in the coming weeks, but pointed out that prices were actually reduced on January 5th. This occurred because of the fall in the price of crude oil which more than compensated for the fall in the value of the pound against the US dollar - the currency in which oil is traded on international markets. Industry sources expect this to continue in the next few months. Mr David O'Driscoll, finance director of Ford Ireland, said he did not forsee car prices increasing. While some 70 to 75 per cent of Ford vehicles originate in the Britain, he said other factors such as the competitive local market and the recent increase in sales due to the scrappage scheme had cancelled out many of the pressures to increase prices.
On the retail side, the goods facing the first set of increases are likely to be a small amount of perishable items brought in from Britain and the continent.
Superquinn said that around 20 per cent of their produce comes from the Britain, while around 60 per cent is from the Republic.
Mr Eamonn Quinn, its marketing director, did not envisage any increase in the near future, but conceded that one is likely in two or three months. Mr Quinn said the company would not tolerate suppliers who tried to raise prices with "undue haste".
A Dunnes Stores source said that if British or European suppliers were operating at a extremely disadvantageous rate, Irish suppliers might be presented with "new openings".
