JUST 75 miles separate Dun Laoghaire from Newry, but north of the border there's a southern-fuelled boom. Newry, along with Enniskillen and Derry, is awash with Irish euros.

There's nearly full employment in the retail trade, supermarkets are taking on temporary extra staff for Christmas and there's near 100 per cent occupancy of shopping units, according to Newry Chamber of Commerce CEO Orla Jackson.

Meanwhile, Dublin's seaport town is, just six weeks before Christmas, blanketed in doom and gloom. In Dun Laoghaire, there are, according to independent councillor Victor Boyhan, as many as 40 businesses up for sale. The main thoroughfare, George's Street, is pockmarked with vacant shops. A rash of auctioneers' signs advertise premises for sale or rent.

Last Wednesday, family allowance day, was frighteningly quiet in Dun Laoghaire. The weather was terrible, but still the dearth of trade left one wondering how shops manage to survive. They have had 12 months of falling sales with no end in sight -- despite the soothing words of Finance Minister Brian Lenihan that there will "be no repetition of what happened last year".

Like everywhere else in the Republic, the currency exchange rate with sterling and the VAT differential with the UK means the Irish economy will lose more than €810m this year to the North. Last year, the loss was €640m. It was €393m in 2007.

The following morning, not long after the Sainsbury's store opened in Newry, it didn't take long to find out where the money was going to. The southern-registered cars were queuing up outside the car park. The store was buzzing and the trolleys were being filled to overflowing.

The peals of laughter as Dublin sisters Samantha Byrne and Breda Heaney, and their friend Cecily Leonard stocked up on Christmas provisions were infectious.

It was a girly day out, but each expected to spend about €200 in Sainsbury's on boxes of biscuits, drinks and ordinary groceries.

"It's all for Christmas. Prices are cheaper and we will go where we get the best value," said Samantha.

Cecily worked in the construction industry and lost her job last year, so the hunt for good value was important. The three women planned to have lunch and then pop over to the other side of Newry to Smyths toy store.

They didn't know how much they would spend there.

Outside Sainsbury's, a large Dublin-registered coach pulled up with 35 very lively women from the "Nifty Fifties" social group from the Navan Road, in Dublin, on a day out. They were there for some shopping, according to Peggy McDonagh and Marie Dumbrell, but not too much.

They were saving their money for their trip to New York next week.

"We've been saving for two years for it," said Ann Higgins. She had her eyes on Macy's in Manhattan rather than on the frozen veg in Sainsbury's.

David Davidson, regional operations manager for Sainsbury's Northern Ireland, told the Sunday Independent: "As the recession has taken hold, the number of these cross-border shoppers has climbed steadily, thanks to the favourable exchange rate and the fact that customers are now prepared to travel further to purchase goods at low prices.

"In the past couple of months, southern shoppers are not only visiting our border stores in Newry, Armagh and Derry, they are travelling to our other northern stores, such as Sprucefield, Dungannon and Belfast.

"Our Northern Ireland stores are among the best performing in the company, with sales of alcohol, baby products, confectionery and household goods particularly popular with southern shoppers."

Later, outside Smyths toy store, Amanda and Trevor Kelly from Longwood, Co Meath, were loading up the boot of their car with toys.

They came north armed with a Smyths catalogue with euro prices and picked up the northern catalogue with sterling prices in the Newry store. They were buying for their own children, and nieces and nephews.

"We are saving between €20 and €30 on the big toys, the trikes, and scooters, although the smaller items are about the same price north and south," said Amanda. They picked up a go-cart on sale in Dublin for €80 for £50 in Newry.

Husband Trevor, a plumber by trade, had been out of work for eight months. Earlier this year, he landed a job in telecoms. "Glad to be back working. So it's happy days really. A nice day out for the pair of us," he said.

At a recent conference, Professor Mike Smyth, an economist with the Ulster Business School at the University of Ulster, commented that it could possibly take another 10 years before prices on both sides of the border equalise, and that cross-border shopping would be with us for the foreseeable future.

That means a busy few years for Orla Jackson of Newry Chamber of Commerce. One of her tasks will be to lure southern shoppers from the supermarkets and outlying retail centres into the heart of Newry.

It's working. Hill Street and Monaghan Street were also busy last Thursday. She says that one of areas where she sees potential growth is to try to keep southern shoppers for the weekend rather than just for the day.

"The Canal Court Hotel has really high occupancy levels at the weekends. We want people to stay and visit the Mournes -- to make Newry as much about tourism and leisure as about hunting for bargains."

There is an energy in the town. Family butcher John Gorman loves southern customers who have given him a boost at a time when the local population, heavily reliant on the construction industry, are feeling the pinch.

It's not all good news in Newry. While retail is flying, there is significant unemployment in other sectors.

Further up Hill Street, assistant manager of Super Valu, Sean McGivern, is taking on 20 extra staff for Christmas on top of 100 staff already in the supermarket. Shoppers from the south flood into his shop. Baby products and drink are the big sellers.

It costs £9.99 for Pampers Jumbo Boxes, while two boxes of Budweiser -- 30 bottles -- cost £20.

Just 15 minutes' drive north of Newry, in Banbridge, at the the €90m retail centre The Outlet, marketing manager Christine Watson recalled the surge of surge of southern shoppers who had taken advantage of the October bank holiday weekend to head north.

"It was just incredible. It was our biggest surge ever of euro shoppers, with 80 per cent of business coming from southern shoppers."

Back in Dun Laoghaire, retailers can only dream of such buoyant trade. As Wenmi, the Chinese proprietor of the highly rated restaurant and deli The Art of Eating says, "I am struggling; the whole of Dun Laoghaire is struggling. It is very, very tough."

Florist Ann Joyce admits she has faced a stark choice -- pay her rates or pay her staff their wages. "I have to pay the staff," she says.

She knows the cross-border retail trade is deadly for southern retailers but she says that Dun Laoghaire has shot itself in the foot in other ways.

"The main aim of the local council has been to drive shoppers out of Dun Laoghaire and into Dundrum.

"Dun Laoghaire was raped and plundered during the Celtic Tiger years," she says.

Breasal O Caollai of the local business association concurs: "There was no Celtic Tiger in Dun Laoghaire. This year has been a disaster."

Sunday Independent