Northern shopping centres are reporting a drop of up to 25 per cent in the number of people crossing the border to shop.
This follows a survey, released last week, which suggested that up to 35 per cent of those who would categorise themselves as ’’cross-border shoppers” had not gone to the North for goods so far this year.
At the height of cross-border fever in mid-2009, an estimated 250,000 householders were travelling across the border to buy cheaper goods.
However, a number of factors have significantly reduced these numbers, including a weakened euro, deflation in the Irish economy and drops in grocery prices and alcohol excise tax.
Cathal Lofton, manager of the Quays shopping centre in Newry, said about 35 to 40 per cent of customers coming to the centre were from the Republic.
This, he said, was down from around 60 per cent last year.
’’Back four or five years ago, it was 30 per cent, so we are still ahead on those terms,” said Lofton. ’’We knew the spike was cyclical and actually prefer the current figures, so there is not a boom-and-bust unsustainable scenario.
This is also an all-island economy, and we do not want the likes of Dundalk and Drogheda suffering the way they were before.”
Lofton said there were still ’’peaks” in visits from Republic shoppers, especially over the three bank-holiday weekends this summer, and added that the back-to-school business was ’’brisk”.
’’The £1 shops, or Euro General chain, are doing major business now on exercise books, pens and other items for school.
When people travel up, they also spend significant sums here, and the opening of the new Newry bypass means we are now only 40 minutes from north Dublin,” he said.
’’Alcohol is still a big draw, and, for every trolley of shopping going to the Republic, there is usually a trolley full of alcohol, too.”
Elaine Quinn, marketing and events executive at The Outlet in Banbridge, Co Down, agreed that there had been a ’’general reduction in southern footfall in the North in recent months”. However, she added that figures had remained ’’relatively stable”.
’’We have not experienced the constant double-digit drop-off some other schemes have reported,” said Quinn.
’’The recent completion of the Newry bypass, along with our new all-Ireland advertising campaign, has already resulted in an year-on-year increase in footfall in recent weeks, and we expect to further build on this in the coming months, especially in the Christmas build-up.”
Retail Ireland director Turloch Denihan said the reduction in cross-border shopping was welcome, and could be attributed to five major factors.
’’It started with the very bad weather in January, which was a disincentive to travel, and then the euro started to weaken – currency fluctuation is what started the trend and is now causing its contraction,” said Denihan.
’’For example, in January 2009, there was a 34 per cent price difference in a representative basket of goods, and that is now down to around 7 per cent, according to our research.”
He said that the third factor was deflation, and the price cuts introduced in the Republic – an average drop of 8.6 per cent had been experienced over the last 18 months.
’’The fourth factor is the reduction in the alcohol excise rate here and increase in Vat in the British budget.
The fifth is that the novelty factor wore off,” said Denihan.
’’Fuel prices increased and people realised that spending a day driving, and in gridlock, for shopping was not worth it. Bar an unprecedented economic event, we think the concept has mostly panned out.”
Source: The Sunday Business Post, 22/08/10
Journalist: Nicola Cooke
