Shopper numbers fall 6.5% in Republic

SHOPPER numbers at Irish stores fell 6.5% over the last three months as the popularity of heading North in search of bargains continues. This news comes as Bank of Ireland predicts house prices will fall by 10% this year.

The biggest footfall drop at Irish stores was a 7.6% decline in June while shopper numbers were down by almost 7% in May and 5% in April, according to services firm Experian.

Figures were down by just over 4% in the first three months of the year.

Confirming the exodus of shoppers to the North, the figures show numbers there jumped 7% in the first six months of the year against the same period last year.

Shoppers are being forced to pay higher prices in the South because the cost of doing business in the retail sector here can be up to 25% higher than in the North, according to Experian, which means higher prices in the Republic.

Property services manager with Experian Mark Mullally said: “This situation is exacerbated by inflated overheads for retailers and the prospect of a summer with fewer tourists.

“For example, in May visitors to Ireland were down by almost 20% compared to last year.

“During the first quarter of 2009 weekly footfall in Northern Ireland was massively inflated, showing increases in footfall traffic of up to 24% on the same period last year.

“However, during the last six weeks footfall in Northern Ireland appears to have levelled off,” he said.

Mr Mullally said that the real challenge for retailers in the current climate is to examine exactly who their customers are, how their needs are evolving and how they can meet those needs.

The most recent figures from the CSO show over the year retail sales were down 17% in April, led by plunging car sales and falling demand for furniture, electrical goods and clothes.

When car sales are excluded, sales fell 7.1% in April from a year earlier.

Furniture sales fell 38% from a year earlier, clothes sales declined 10% and sales at bars fell by 12%.

Bank of Ireland chief economist Dan McLaughlin said prices are now back at mid-2004 levels. He said that the average new mortgage for house purchase this year is set to fall to €240,000 from €270,000 last year.

“Average incomes are likely to fall too in 2009 but we still expect the average new mortgage this year to cost 32% of income to service, down from an historic high of over 44% last year.