Tesco prices - Euro parity should set retail trend

THE move by Tesco to proffer price parity in the sale of clothing to Irish customers is to be warmly welcomed. Irish shoppers were being ripped off in being asked to pay a price in euro that was considerably higher than the sterling equivalent that consumers were paying in Britain.

Retailers have been treating consumers with contempt by marking up prices well beyond appropriate equivalent. This was used as a licence to screw the Irish consumer.

Clothes that cost £30 in Britain or Northern Ireland often cost as much as e45 in the Republic. Now Irish buyers will be paying the same numerical price in euro that the British are paying in sterling. This means that Irish shoppers will be effectively be able to buy clothes at 7% cheaper in the Republic than in Britain or Northern Ireland.

Tesco announced the change as part of e20 million investment to ensure that clothes in its stores are cheaper in Ireland. This should help to redress the imbalance in prices between the North and the Republic.

The pressure on Irish consumers — especially in the border counties — to shop in the North was reaching irresistible levels. This should entice more people to shop at home, and it should thereby help to alleviate some of the pressure on the retail sector, which has been seriously hurt by the economic downturn.

The move should also put pressure on other retailers to follow suit, as Tesco is the second largest supermarket chain in the country. In view of the level of investment in the initiative, it should continue for at least a few months. Hopefully this will spark the kind of competition that will bring prices down.

“Finally we have some sanity in a world of madness,” said Dermot Jewell, chief executive of the Consumer Association of Ireland. “Tesco will be remembered for being one of the first retailers to do this.”

Of course, it may well increase the company’s share of the market, but it will deserve this, especially if other companies do not follow suit.

The onus is on retailers to help themselves, especially when so many people have found shopping in the North so much more attractive. The economy is already so badly hit that pressure to attract consumers has been increasing and the price stabilisation initiative should start a welcome trend.