Sterling weakness leading some shoppers to head North
Retailers along Border largely optimistic about prospects despite sterling decline
The Christmas market outside Belfast City Hall. While retailers in the Republic have noted an increase in the number of shoppers crossing the Border of late, many say they are not as concerned as in the past
With sterling at a low, shoppers are heading to the North in the run-up to Christmas to snap up bargains but in nowhere near the numbers seen a decade ago when the pound came close to parity with the euro.
Sterling tumbled to its weakest in 20 months earlier this week after British prime minister Theresa May pulled a parliamentary vote on her Brexit deal with the European Union. But while retailers in the Republic have noted an increase in the number of shoppers crossing the Border of late, many say they are not as concerned as in the past.
As store owners brace themselves for one of the busiest shopping weekends of the year, Paddy Malone of the Dundalk Chamber of Commerce said the rise in inflation in the UK over the last year had made it less attractive for consumers to head north.
“Things are on a par with last year if not slightly ahead in terms of retail. We were expecting that with sterling falling in value that there would be some haemorrhaging,” said Mr Malone.
“But inflation has been increasing in the UK for the past while, so even though sterling has been devaluing, prices have been increasing quite dramatically. The result of this is that there aren’t as many bargains to be had as in previous years,” he added.
Mr Malone said retailers along the Border were largely optimistic about their prospects during the holiday season, outside of off-licences, which he said were particularly vulnerable to currency fluctuations.
He said Dundalk had witnessed an increase in shoppers in recent weeks from people choosing to visit the town to shop at Penneys, after the recent fire in Belfast, which saw the closure of the company’s Primark outlet in the city centre.
“It has been a surprise to see how positive retailers have been of late because they are usually the first to moan and tell me the glass is half empty,” said Mr Malone.
Aodhán Connolly, director of the Northern Ireland Retail Consortium, noted a rise in shoppers heading north in recent weeks.
“There is good evidence for southern shoppers taking advantage of the strong position of the euro and retailers are prepared for what will hopefully be a strong influx in the shopping days left until Christmas,” said Mr Connolly.
He warned, however, that retailers north of the Border could not be sustained or grow just on the back of currency fluctuations.
David Fitzsimons, group chief executive of Retail Excellence, which supports more than 1,850 Irish retailers, said things were not as bad as they were in 2008, when there were coachloads of shoppers crossing the border to buy goods.
“There is definitely an increase compared to recent years with €65 million spent on groceries alone by southern customers up North in the last 12 months,” he said.
Mr Fitzsimons said retailers in the Republic were trying to respond to this by being as competitive on pricing as they could be. However, he added that a bigger concern was the high number of shoppers choosing to buy goods online.
“Over 70 per cent of the money being spent online goes to international online companies, most of whom don’t apply customs charges or VAT, leading to a 30 per cent differential compared to high-street retailers,” he said.
Mr Fitzsimons noted that the UK government had introduced legislation that forces international online sellers to register for and apply customs and VAT duty.
“We seem to turn a blind eye to international online stores not doing this here even though it is worth tens of millions to the exchequer and gives international sellers a distinct advantage,” he said.
Mr Fitzsimons said the rise of Black Friday as a shopping phenomenon locally had also led to a decline in consumer activity in the run-up to Christmas.