CROSS BORDER SHOPPING:Crossing the Border once meant big savings on the weekly shop, but not any more as exchange rates and tax hikes make buying in the North less attractive for shoppers from the Republic
SO, IT TURNS OUT that all our politicians had to do to stem the flow of people crossing the Border to do their shopping was nothing. Over the past few years, when price discrepancies between Northern Ireland and the Republic of Ireland were highlighted, the Government wrung its hands, commissioned costly reports and – occasionally – swore like dockers in the Dáil chamber but seemed to do very little of substance to address any of the issues.
Now it seems the problem has just gone away. Over the past three years, hundreds of thousands of shoppers from the Republic poured across the Border. The favourable exchange rate, lower VAT and excise rates combined with lower profit margins for the North’s retailers brought about the sort of vast price differentials between the jurisdictions that many cash-strapped consumers found impossible to ignore.
Not any more. Recently, as Pricewatch made its very first venture across the Border on a shopping expedition to find out if there were still significant bargains to be had, it was all quiet. There was tumbleweed blowing down the aisles of the giant Sainsbury’s outside Lisburn and only a handful of cars from the Republic in the car park.
Mind you, part of the reason it was so desperately quiet was because it happened to be July 12th. “Everyone’s either out marching or avoiding the marches by staying at home,” the girl at the till said as I piled my mountain of shopping on to the conveyor belt. “But even so we have noticed a dramatic fall-off in the number of people coming in from the South in the last few months. Most of it is down to the exchange rates, I think. A year or so ago we were offering 90p for a euro, today it’s just 79p.”
Exchange rates are one element. Tax rates will be another. When the British Chancellor of the Exchequer George Osborne published his emergency budget last month there were howls of protest from retailers in the North as he announced the UK’s VAT rate is to increase from 17.5 per cent to 20 per cent from January. The move, the North’s retailers said, could cost the economy there millions of pounds in lost revenue from cross-Border shopping.
Francis Martin, president of the Northern Ireland chamber organisation, said the increase in VAT could in general have a “negative effect” on small enterprise because it will increase the cost of doing business. The independent retail trade association said it was a “regressive move” which would hit everyone in Northern Ireland, from low-income families to pensioners.
There was no such glumness coming from the southern side of the Border. Politicians issued statements welcoming the moves while retailers rubbed their hands in relieved glee. Speaking at a corporate function last week Tesco Ireland’s chief executive Tony Keohane described how Tesco had played its part in successfully reversing the flow of cross-Border shopping.
He said Tesco was “in the happy position of managing queues in-store again” and thanked his supplier base for their support during a time of great change. “Ireland has changed radically, Ireland has changed fundamentally and Ireland has changed probably forever,” he said. He claimed that moves by the big grocery retailers in the Republic – and there is none bigger than Tesco – had led to a 40-50 per cent drop in cross-Border shopping, this year rising to 70 per cent in certain key categories such as health and beauty products. As a result, he said, Tesco’s Irish arm had seen nine consecutive periods of growth for Tesco.
A year ago, when there were real bargains to be had in the North, the Republic’s shoppers could load up their trolleys in Sainsbury’s with pretty much anything, secure in the knowledge that it would work out substantially cheaper. Today it’s not like that.
A six-pack of Pampers baby wipes which can be bought in Tesco in the Republic for €7.78 costs £7.49 (€8.93) in Sainsbury’s. Pampers nappies – one of the products that drove many people with young children across the Border over the past three years – are now almost identically priced in both jurisdictions.
A 50g jar of Nescafé which was selling for £1.65 (€1.97) in the North has a price tag of €1.66 in our local Tesco in Dublin.
There are still of course bargains to be had – although sometimes the price differences are not as extreme as they may once have been.
Sainsbury’s own-brand painkillers are ridiculously cheap, with 16 paracetamol capsules costing just 20p (23 cent) and 16 ibuprofen priced at 28p (33 cent) more. A packet of eight Duracell Ultra AA batteries which cost €11 in the Republic costs £3.99 (€4.76) in Sainsbury’s, but they were on a buy-one-get-one-free deal which dramatically increased the potential savings. A 130g bag of Doritos nacho crisps costs 99p in the North, giving a unit price of 76p (91 cent) per 100g. The unit price of the same crisps in my local Tesco is €1.18 per 100g. Original Source Tea Tree and Mint shower gel which has a price tag of €3.99 in the Republic is €3.60 in the North.
Cheaper generic medicines aside, it is alcohol where the biggest savings can still be made, although readers will need to do a bit of research as some price discrepancies are not as great as you might imagine and sometimes alcohol actually costs more in the North.
Last week Tesco was selling bottles of Jameson for €20 while the best Sainsbury’s could manage was £17.99 (€21.46). Hennessy Cognac meanwhile, which costs £21.50 (€25.65) in Northern Ireland, is €26 in Tesco.
Wolf Blass wines which had a price tag of £7.99 (€9.53) in Sainsbury’s sell for €10.99 in Tesco while Oyster Bay merlot also costs €10.99 in Tesco down South but £6.99 (€8.33) in Lisburn.
The real savings on wines come on the Sainsbury’s special deals bought by the case load.Last week good quality wines which normally sell for £8 (€9.54) were reduced to £6 (€7.16) with a further 25 per cent knocked off if purchased in cases of six. So wines which would normally retail for around a tenner in the Republic were costing €5.50 in the North. Beer can also be a whole lot cheaper. A 20-bottle case of Miller beer is €20 in Tesco outlets in the Republic but just £12 (€14.31) in the North.
We carried out a straw poll on Twitter last week asking if people would still bother crossing the Border to shop given the narrowing of the price gap. The response was mixed. “Hell, yes, as prices are still lower, all factors accounted for, and that’s before the higher standard of service in retail,” said one person.
“I don’t know how anyone could be bothered doing it under any circumstances. Painful enough shopping in local supermarkets,” said another. “Not for normal purchases. Maybe for a major item,” was the considered response of a fourth. “It’s the market. With lack of competition from the North prices will be put up in the South. Or is that cynical?,” asked another. Probably, but that doesn’t make it any less true.
