Shoppers to flock North as sterling continues to drop
Concerns are growing that plummeting sterling prices will create a crisis for Irish businesses as shoppers look to the UK for bargains ahead of the busy Christmas period.
Retailers are fearful that many shoppers will look to do much of their shopping online or travel to Border towns such as Newry, to make huge savings on goods and luxury items.
Retail Excellence Ireland CEO David Fitzsimons appealed to the Government to lower the cost of doing business in Ireland.
He said this should include a 3pc lowering of VAT to 20pc.
"It has got to the level where it would motivate consumers to go north. It would also certainly, in a digital age, motivate consumers to go online and buy from sterling websites.
"In recent weeks we have seen a moderate increase in the level of cross-border shopping, and that is going to accelerate over the next couple of days.
"The timing is appalling for us because it is not too far to Christmas," Mr Fitzsimons added.
It comes as businesses in the Border region recorded a sales drop of 6pc yesterday compared to last year. Much of this has been put down to shoppers travelling across the Border into Northern Ireland.
Car sales have already been affected by the pound dropping in value, with used car imports from the UK increasing by 80pc last month.
A sterling "flash crash" saw the currency fall by 6pc against the dollar, and 3pc against the euro, in the space of a couple of minutes on Friday, before it eventually made up much of the losses later in the day.
Mr Fitzsimons appealed to the Government to address the issue in Tuesday's Budget.
"We need to quickly realign our cost base with that of the UK market. Our PRSI rate for low-paid workers is at 8.5pc, doubled from 4.25pc two years ago. The PRSI for low-paid workers up North is zero.
"The cost of business in Ireland has to be reduced otherwise you cannot be expected to price match the UK. If we don't, we will have a real crisis on our hands.
"There are 282,000 people who work in retail in Ireland and we could see a serious contraction in those figures if something is not done about it."
Ibec's group, Retail Ireland, also warned of a need to address Brexit concerns in the Budget. Director Thomas Burke said online sales were already having a huge impact on the retail industry, with 70pc of internet sales revenue leaving the State.
"In 2015 the total value of online purchases by Irish consumers was €9.1 billion, with clothes, sporting goods and books the most popular items purchased.
"The emergence of other sales platforms in recent years such as click and collect and home delivery has greatly increased convenience for the consumer, but has proven logistically and financially challenging for Irish retailers," said Mr Burke.