'Newry effect' has slowed to just a trickle, says cross-border group
Published 06/08/2010 | 05:00
Cross-border shopping, or the so-called "Newry effect", has slowed to a trickle and is now worth just 1.4pc of retail spending nationally, Inter Trade Ireland has said.
The group released the results of surveys from shopping centres across the North this week, showing the number of cars with southern registrations falling to the lowest level since September 2008.
The surveys, independently produced and not compiled directly by Inter Trade Ireland, cover shopping centres in Newry, Enniskillen, Banbridge and Strabane.
In early 2009 at peak hours almost 70pc of cars could have southern registrations, but this had now fallen to about 45pc.
Inter Trade Ireland, a north-south business development body, also cited figures from the CSO's quarterly national household survey about retailing in the North.
Aidan Gough, a director with Inter Trade Ireland, said the scale of cross-border shopping had been exaggerated.
In 1988, cross-border shopping amounted to 2pc of national retail expenditure, but in 2009 it was 1.4pc, he said.
Recent changes to VAT rates in the UK have also closed a gap between the two jurisdictions.
The organisation said the net loss to the Exchequer from shopping in the North was about €45m in VAT and €25m in excise, representing less than 5pc of total VAT and excise receipts.
The organisation said proximity to the Border was a key factor for those who shop in Northern Irish towns. The highest proportion of households shopping across the Border (41pc) were from border towns, with only 20pc coming from Dublin. Few shoppers from areas like the south-east and mid-west travelled over the Border for retail purposes.
Mr Gough said the shopping centre surveys, while not produced by Inter Trade Ireland, were a very good indication of north-south shopping flows.
Cross-border shopping was "not new'' and mostly involved border counties. "It will ultimately lead to cost and price reductions," he said.
Inter Trade Ireland is trying to help business to grow through cross-border trade and innovation, offering companies sales and marketing support and tax and legal advice.