All roads lead to Newry as consumers shop around

 

BRITISH RETAIL giants Sainsburys and Asda captured a 2.5 per cent share of the grocery market in the Republic last December even though they have no shops here, latest market research figures show.

The figures from TNS Worldpanel, which were presented to the Checkout retailing conference yesterday, reveal the the extent of the massive cross-Border shopping exodus before Christmas last year. Sainsburys recently revealed its Newry store has the highest sales for any of its 785 outlets for alcohol, confectionery and baby goods.

In contrast, in the Republic retail sales fell 3 per cent in December, with alcohol sales down 9 per cent, John Ruddy, editor of Checkout magazine, told the conference. Retail sales are at a 24-year low, he said, and 1,000 retail jobs were being lost each week. Consumers were trading down and cheaper own-brand labels were a growing part of their purchases. He pointed out that a quarter of all goods sold in Dunnes Stores last year were “on deal”.

John Burns, marketing manager of Guinness, said consumers were seeking “beacons of optimism” as a response to the recession. “People feel their lives are out of control and they are deeply uncomfortable about this. Brands which help them feel empathy and a sense of control again will gain in these times.”

Recession would prompt a return to traditional Irish values and a rise in community spirit, he predicted. Some people already were delighted the rat race was over, while everywhere bling was “out” and displays of wealth were seen as anti-social.

Mr Burns urged businesses to emphasise community links and local roots, to communicate heritage and to stress “nostalgia” in their marketing.

Ann Fitzgerald, chief executive of the National Consumer Agency, said that for years consumers had “lashed the money out” and were very poor at shopping around. Now all that had changed and the inertia was gone.

According to research carried out by the agency, consumer confidence was going up as shoppers exercised greater choice. Last year, 51 per cent said they had changed their grocery shopping habits and 80 per cent of these had switched in search of greater value. In 2007, just 31 per cent of shoppers cited price as the main criterion they took into account when shopping; by last year, this percentage had risen to 60 per cent.

“The days when retailers could discount price as the basis for shopping decisions and say that convenience mattered more are long gone,” she said.

Michael Heberle, of market analysts Nielsen’s, said the decline in Irish retail sales was the steepest in Europe.