Retailers’ failures to pass on the benefits of the strong euro against sterling to the consumer are being blamed on exchange rates at the time the goods were purchased by the retailer; the cost of doing business between the jurisdictions; and on tax rates.
Enterprise Minister Mary Mitchell O’Connor says she was given these reasons for the differential between prices quoted in the two currencies when she attended the Retail Consultation Forum earlier this week.
In a response to a parliamentary question from Social Democrats TD Catherine Murphy, she said she told the forum it is her view that retailers should explain to their customers and to the economies in which they operate why there are such price differentials between the two currency areas.
“I am working with the sector to ensure an ongoing response by retailers in the period ahead with a view to securing satisfactory progress on the issue,” she added.
However, Ms Murphy said she does not “buy” the reasons given for the differential at the forum: “Magazines, for example, are some of the worst offenders. There is well over 30% of a differential even after the sterling exchange rate is taken into consideration. That is not something that you buy six months in advance.”
Ms Murphy said Ireland is particularly exposed as our retail sector features a large number of British multinationals. “In the likes of the north, people were going to the same shops and getting goods for substantially less,” she said. “Then they are made to feel like they are not wearing the green jersey because it causes a risk to the exchequer here and to jobs. That is all valid, but there is a responsibility on the retailers as well, particularly the big multiples.
“Increasingly people are going online and it will undermine their businesses here. They will eat their own flesh. The queues going across the border will only accelerate unless there is something to arrest it.”
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