Published: Friday, 5th February, 2010 11:00am

End of shopping love affair with North?

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John Foy, president of Cootehill Chamber of Commerce

"Keep the momentum going; have value here for the consumer". That is John Foy's message to his fellow retailers in the Border counties and across the wider 26 counties as recent figures reveal that the numbers going North are falling off.

The latest trend will be welcome relief to retailers in Co. Cavan as figures published last week estimate that consumers from the Republic spent €810 million shopping up North in 2008 - a 25% increase on 2007 figures.

Mr. Foy is President of the Cootehill Chamber and also chairman of RGDATA, the independent retailers organisation. RGDATA has 3,800 members across the state and there has been concern in the retail sector, especially among small independent retailers in the Border counties of the Republic, that they might not be able to survive in the face of the trading competition provided by such big multiples as ASDA in Enniskillen.

ASDA, which is owned by the U.S. Walmark group, appeared to have unstoppable pulling power in terms of attracting shoppers from a huge catchment area stretching through South Ulster into Leinster, Connacht and indeed as far as Munster. However, the New Year has indicated a sharp reduction in the number of Southern shoppers heading North to Enniskillen, Newry, Armagh or Belfast. The reversal of the pre-Christmas shopping rush to those Northern towns has been greeted with cautious relief by business owners on this side of the Border. Shop owners in Cavan, Monaghan and other counties right on the North/South dividing line hope that they have weathered the storm and that they can look forward once again to trading in a more secure environment.

Reacting to suggestions that the cross-border shopping bubble has burst, the President of the Cavan Chamber, Eamon McDwyer, described it as welcome news. He believed that it could be attributed to a number of factors.

"Firstly sterling has gained in strength against the euro and is now trading at 0.867, which makes it less attractive for people to shop across the Border. Secondly, as we have been saying for some time, prices in the Republic have dropped as retailers fight to retain their trade and to reduce their cost base. Thirdly, the budget in December was not as harsh as expected and may have drawn a line in the sand, which will help bolster consumer sentiment," he surmised.

"Finally the adverse weather conditions in the run up to Christmas discouraged shoppers from travelling and they saw at first hand the value in their own locality," concluded the Cavan Chamber President.

Meanwhile Mr. Foy described as heartening the level of co-operation that now exists between wholesalers and retailers from the Republic who are working together to reduce prices for the benefit of the consumer. "The strengthening of sterling against the euro is helpful plus the fact that there is now greater value for money here in the Republic. Another factor is the issue of customer loyalty with a growing desire by people to support businesses in their own town and county in a bid to sustain jobs," stated Mr. Foy.

VAT factors

The raising of the UK VAT rate from 15% to 17.5% together with the strengthening of sterling against the euro has reduced the attractions for shoppers from the Republic to head North.

Cheaper alcohol has been one of the big incentives in driving this North bound trade but most observers regard it as seasonal and not part of the overall shopping pattern. John Foy is a long time advocate for the reduction of excise duties by the Irish government, which he says would help level the playing pitch for stores and off licences here in the Republic.

Maintaining the commercial life of smaller towns in the face of competition by the big multiples in strategically located larger centres is the challenge going forward. However, stores such as SuperValu, Centra etc have shown a capacity to confront this challenge and are offering their customers wide choice and good value for money. The months ahead are likely to be exciting in the Irish retail sector and it maybe the big super stores who will be feeling the chill of the recession as people cut back and shop local.