25% jump in cross-Border shopping - survey

 

SOME 250,000 households in the Republic are now regularly doing their grocery shopping in the North, up 25 per cent since the end of last year, according to new figures.

There has also been a major increase in cross-Border alcohol shopping, the latest figures from market research firm Nielsen Ireland show. Off-licence sales in the North have risen by 30 per cent in the year to August, while off-sales in the South are down by 7 per cent.

Separately, figures compiled by InterTrade Ireland, a North-South business development body, show the proportion of Southern-registered cars in shopping centre car parks in Newry, Enniskillen and Derry has increased from 40-50 per cent over the summer to 70 per cent now.

Cross-Border shopping will cost the Republic’s economy over €810 million this year, it is estimated, compared to €640 million last year and €393 million in 2007.

“Cross-Border shopping has picked up significantly again,” commented Eoin Magennis, policy research manager of InterTrade Ireland, “and is probably as high as it ever was”. While people were shopping less often than before, they tended to buy more when they make the trip, he said.

The cross-Border shopping phenomenon has benefited the retail multiples far more than smaller shops, he said. In contrast, local shoppers in the North have moved their custom elsewhere because of the delays and traffic congestion caused by Southern daytrippers.

Up to 25 per cent of goods bought in Newry are purchased in euro, according to Orla Jackson of the town’s chamber of commerce. She said there had been a “marked increase” in shoppers crossing the Border in recent weeks due to the changes in the exchange rate.

However, Bill Tosh of Dundalk Chamber of Commerce said trade in the town was holding up, and that major retailers were “holding their own”. The exception was the trade in alcohol, where some items were up to 180 per cent dearer in the South.

The drinks industry estimates that by the end of this year, 10 per cent of off-licence business will have migrated to Northern Ireland.

Almost half of all alcohol sold on the island is sold in the North, in spite of its much smaller population than the Republic.

The figures appear to show that the price war between supermarkets in the Republic since May has had only a limited effect in stemming the exodus of shoppers to the North. Although food prices have dropped by up to 20 per cent in some multiples, overall prices are still cheaper in the North.

Tesco, for example, says it charges 12 per cent more in the Republic than Northern Ireland because of the higher cost of business. A recent survey by the Consumers Association of Ireland puts the margin in Tesco’s stores at 18 per cent on a basket of goods.

The Alcohol Beverage Federation of Ireland, which released the Nielsen figures, said alcohol was a major contributory factor driving cross-Border shopping. Its director Rosemary Garth called on the Government to address the issue of higher alcohol taxes in the Republic relative to the UK.

“Both drinks industry and retail groups have estimated that cross-Border shopping has cost the Irish exchequer €400 million in lost revenue this year. This figure is set to increase in advance of Christmas as thousands more shoppers will understandably choose to shop in Northern Ireland, in particular should the rate of sterling continue its present decline against the euro.

“The consequences for jobs and revenue, particularly in the Border region, are profound. Our industry supports 90,000 jobs across bars, restaurants, manufacturing and supply. Many of these will be at risk as a direct consequence of cross-Border shopping.”

Retailers are also calling for Government action to stave off another disastrous Christmas shopping season this year.

Retail Ireland, an Ibec sub-group, says excise on alcohol in the Republic should be cut by 20 per cent to discourage people from shopping in the North.

Excise rates in the Republic are the highest in Europe for wine and the second highest for beer and spirits, it points out. It has also called for a reduction in the VAT rate from 21.5 per cent to 18 per cent to stimulate retail sales.