Making Cents: How shopping local is more important than ever

Grainne McGuinness

Picture: Stock

From utilities to groceries, the sharp hikes in the cost of living present a real financial threat to many Irish households. As bills for necessities rise, many of us are understandably looking for ways to cut costs. And when fears about the costs of living are added to the seemingly never-ending housing crisis, there can be a sense that this is a peculiarly Irish phenomenon. There is concern that this perception may lead to people seeking value by focusing their spending outside the local economy, something which could exacerbate problems in the long run.

Economist Jim Power has highlighted this potential issue in a new report for Champion Green, a national initiative that encourages local spending to drive post-pandemic recovery.

Mr Power highlights that cost-of-living increases are an international issue.

“Practically every country in the developed world is grappling with the highest rates of inflation in a decade,” he said. “Costs are rising globally.  But any perception that this is just an Irish problem could push consumers mistakenly towards online retail abroad, or to cross-border shopping, away from local.” Champion Green organisers believe it is important that this misperception is recognised and addressed, especially given the importance of local spending to Irish businesses.

Irish shoppers showed a real determination to buy local where possible during lockdown and Champion Green says it is vital that trend continues.

“By supporting local businesses, our spend makes them stronger and able to compete,” Marian O’Gorman, Champion Green founder, said. “Lower prices are possible when stores or manufacturers have more volume.  So, each and every shopper in Ireland can help push down the cost of living by keeping money in circulation locally.” In 2021, average Irish consumer prices increased by 5.5 per cent, the highest annual rate of inflation since April 2001. Mr Power says the upward pressure on prices is being driven by global markets disruption, recruitment difficulties, strong consumer demand and limited supply in some sectors.

His report highlights how Covid-19 significantly disrupted supply chains and shipping, with energy prices particularly escalating. Staff scarcity, increased overheads and pandemic related debt has impacted competitiveness in Irish business too. Pent-up consumer demand, due to Covid restrictions, rebounded strongly late last year but this also impacted supply, forcing inflation.

However, the same factors are at play in most developed economies, so imports don’t necessarily mean lower prices, especially when VAT and customs duties have to be considered.

And so, Mr Power wants Irish consumers to bear in mind the multiplier effect of supporting local.

“Every euro spent in the domestic economy is paid out in wages and profits, which are taxed, so, in turn, they get re-circulated in the economy,” he pointed out. “Every euro results in an injection of at least €2.50 in the local economy. This is particularly important as we try to rebuild social services like healthcare and education after the damage caused by the pandemic restrictions”.

Covid also prompted the biggest push ever towards doing business online. With increased price pressures in the Irish economy, it is important that Irish consumers who migrated online, still shop with local retailers online, or in person, as far as possible, the Champion Green report author says.

“This helps support Irish jobs and regional economic and social vibrancy,” Mr Power said. “Each online purchase with an overseas vendor represents an outflow of money from the Irish economy, undermining Irish businesses and their ability to compete.”

Pick of the week

Aldi egg chair

As we plan for brighter days ahead, Aldi have a budget version of one of the must-have outdoor items of recent years going on sale on Thursday. 

The retailer is selling a Gardenline Small Hanging Egg Chair for €199.99, as part of a range of garden equipment and accessories. The powder-coated steel frame is approximately 195 x 100 x 95cm, with the chair itself 113 x 85.5 x 64cm (approx.). 

The set includes seat and back cushions and a safety strap with hook and loop that helps to keep the chair safely in place while getting in and out. 

"Perfect for the patio or conservatory, this comfortable rattan effect hanging chair will be your seat of choice," Aldi says. "Simply swing up your legs and make the most of that comfortable space."

The chair and other garden accessories go on sale in Aldi stores on Thursday March 3.