€810m price tag on NI shopping

CROSS-BORDER shopping cost the Irish exchequer €810 million last year, equal to 3.5% of the retail market.

Shopping in the North was up 25% last year compared with 2008 with a quarter of a million households in the Republic now doing their grocery shopping in locations such as Newry and Belfast.

In a further blow to the Irish economy, 10% of the Republic’s off-licence business migrated to the North last year.

This is according to the latest consumer survey covering the last three months of 2009 from UCD Smurfit School and the Marketing Institute of Ireland.

The monitor shows the level of confidence in December last year was 6% better than a year earlier. The average level of confidence for the year as a whole was 4% better than 2008.

Professor of marketing at Smurfit, Mary Lambkin said: “This mass exodus [North] reflects a more consumer savvy population and the need for retailers in the Republic to compete with rock bottom prices on offer just over the border.”

The findings show 55% of consumers are now buying less, 65% are hunting more for value and one in three are trading down or buying cheaper products.

Final retail sales figures are not yet available but the report predicts a 10% fall in consumer spending for 2009 due to a fall in disposable income, a rise in personal savings from a low of 3% of disposable income in 2007 to a high of 11% in 2009 and depreciation of sterling.

All sectors were hit by falling sales with motor trade and household equipment particularly affected.

The motor trade’s downward trend accelerated to a record low in 2009, last seen in 1987, with total private car sales falling 50%. By comparison, new car sales were down 19% in the US, 6.4% in Britain and just 1.6% across Europe.

Other sectors hit in the 12-month period ending November last year were department stores (22%), clothing, footwear and textiles (15%), books and newspapers (16%), bars (13%), food (8%) and pharmaceuticals, medical and cosmetics (6%).

On average, the price per transaction shows women spent €80.55 in Q4 2008 compared to €50.01 in 2009, a 38% reduction.

Chief executive of the Marketing Institute, Tom Trainor said: “A positive from the Q4 report is that retailers perceive that the rate of decline is slowing and that there could potentially be a return to growth by Q3 2010.”

Meanwhile the latest AIB/Amárach recovery indicator experienced its strongest monthly surge in January, reflecting a changing national “mood” and a possible “seasonal boost”.

The index rose from 18.3 in December to 27.1 in January with one third of all Irish adults saying “the economic situation is bad but has stabilised”.