The sound of bolts being slammed shut after the exit of prize race was audible with the news that the Oireachtas Enterprise committee is investigate the impact of cross border shopping on the Republic… But Caroline Byrne of ShelfLIfe trade magazine is adamant that the problems were obvious long before the Minister of Finance delivered the news of the growing hole in the government budget;
This report finds that operating costs are up to 30% higher, for a comparable retail business in the Republic of Ireland, compared to in the North of the country. The government should therefore concentrate on lowering costs such as commercial rates, electricity and waste disposal in order to help put Southern retailers on a more even footing with their Northern competitors.
While Superquinn in Dundalk is the latest casualty of an upsurge in cross-border retailing, the writing has been on the wall now for months. In a ShelfLife exclusive survey of cross-border retailers published in our August issue, we found that 84% of border retailers had received complaints from customers about the prices they were charging, and 96% of retailers were aware of, or had been told by customers, that they were travelling over the border to shop.
ShelfLife also found operating costs to be significantly higher in the Republic of Ireland. Specifically; wages are 30% higher, rent is up to 185% higher, and the fact that VAT here rose to 21.5%, at a time when the UK Government was decreasing its VAT to 15.5%, only adds to Southern retailers woes.
Other findings in the survey of southern retailers include:
80% are not satisfied that their wholesaler is offering them the most competitive price available
92% have brought a complaint regarding wholesale prices charged, to the attention of their symbol groups head office
52% believe that their wholesale agreement allows them the flexibility to compete, while 48% think it is unduly restrictive
92% have travelled to the North of Ireland to check prices
92% have noticed a downturn in business
You can download our latest podcast: Calm down, it’s only an Irish recession…
Mick is founding editor of Slugger. He has written papers on the impacts of the Internet on politics and the wider media and is a regular guest and speaking events across Ireland, the UK and Europe. Twitter: @MickFealty