SPENDING in border towns such as Dundalk and Letterkenny is down almost 6% over the last year despite attempts from retailers to keep shoppers in the South.
Research conducted by services firm Experian found, on the other hand, that spending in Northern locations such as Enniskillen, Newry and Derry is up almost 5%.
Irish footfall figures have fallen by up to 8% this year while Northern Irish footfall has increased by up to 7%.
Director of retail and property with Experian Jonathan DeMello said: “Irish retailers, already weakened by higher operating costs, rising rents and higher VAT rates have to contend with the exodus of approximately 250,000 households who continue to travel to the North in search of a bargain and recent reports have estimated that cross-border shopping is going to cost the Irish Exchequer up to €430 million in lost revenues.”
Tesco earlier this year launched a massive price cut initiative which was initially rolled out at border stores in an attempt to keep shoppers in the Republic. However stores south of the border have found it difficult to compete with lower prices in the North.
Retailers are calling on the Government to reduce the VAT rate in the Republic and bring it in line with the rate in the North. They said if this is not done more jobs will be lost.
“Christmas is typically a time when spending soars. However, in the current climate of deflated consumer confidence, retailers are going to have to target consumers strategically, identifying exactly who they are and how they, as retailers, can meet their changed needs,” said Mr DeMello.
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