Bargain hunters spending €500m in the North
Related Articles
SHOPPERS from the Republic spent close to €500m on groceries in the North last year.
New figures released by supermarket Tesco yesterday revealed the Republic's grocery trade has taken a 4pc hit thanks to cheaper prices north of the border.
Tesco has not been able to compensate by higher sales in the North, as its stores there are not best-placed to attract southern bargain hunters flocking to Newry and other border towns.
The company said lower prices, VAT rates and weak sterling was resulting in 4pc of the Republic's €12bn grocery trade heading north in the last year.
They said that cross-border shoppers spent €450m to €520m in Northern Ireland last year, the vast bulk of which was spent on groceries. Their estimate was based on a recent Revenue Commissioners and Central Statistics Office report.
Tesco has turnover of €3bn in Ireland and just over a quarter share of the market, so a 4pc drop in business would cost them approximately €120m.
They have seen increases in sales of clothing, bakery, fish and meat, but alcohol and household sales have dropped.
Tesco Ireland chief executive Tony Keohane said he was confident prices would come down over the next year.
"We have been adapting our prices and our product range to reflect changing customer shopping patterns and these have helped the affordability of shopping in our stores," he said.
"We are working to get prices down to levels which conform with customers' reduced incomes," Mr Keohane said.
The Tesco Group announced Stg£3.1bn profits yesterday, but the Irish Farmers Association accused supermarkets of a race to the bottom in their grab for profit, that would ultimately cause a meltdown of Europe's food supplies similar to what had happened in the banks.
Threatening
"Failure to bring the supermarkets under control is putting the European model of family farming at risk, with serious long-term implications for our food supply chain and consumers," said IFA president Padraig Walshe.
The giant supermarket chains were out of control in their rush for profits, threatening thousands of jobs in the food sector as they forced down the price paid to suppliers of staple foods like meat, milk, bread and vegetables, he claimed.
Irish potato, vegetable and fruit growers were being driven to extinction and meat and dairy farmers were working for below the cost of production, he said.
Consumers would ultimately pay the price with food scarcity and poor quality.
- Aideen Sheehan Consumer Correspondent
