Shopping for Ireland

Consumer confidence has flatlined and retailers have experienced their toughest Christmas run-in for 20 years; politicians, business…

Consumer confidence has flatlined and retailers have experienced their toughest Christmas run-in for 20 years; politicians, business leaders and unions have been united in calling on shoppers to show some civic pride by buying local this year.

All this patriot talk started with the Budget. Samuel Johnson once dismissed patriotism as the last refuge of the scoundrel, but it was the first port of call for Brian Lenihan who described his Budget as "no less than a call to patriotic action" in challenging times.

His party colleague and Lord Mayor of Dublin, Eibhlin Byrne, took up the cudgel when turning on Dublin's Christmas lights in early November. She said shopping locally was in the national interest and asked people "to show civic patriotism and make a special effort to do some focused shopping in the city".

Next up was Siptu's president Jack O'Connor. He said "buying Irish this Christmas" was "in the national interest in a very definite economic sense as well as being patriotic. The cost of not doing so is far greater than the short-term benefit from any particular price differential." He said the "cost in jobs lost would only exacerbate the worsening tax/social welfare burden now being experienced and he said every Irish job "lost as a consequence would, in addition, result in further reductions in consumer expenditure in those same retail outlets".

READ SOME MORE

These calls to spend in the national interest appeared to fall on deaf ears as rip-off refugees continued to flood across the Border in second half of November. There were mile-long tailbacks outside Newry from early last Saturday and people were fighting over shopping trolleys in Sainsbury's as soon as the store opened.

Minister for the Environment John Gormley called for action to "stem the flow of shoppers" northwards. A cynic might be forgiven for asking if he was so concerned about keeping business local, why he didn't suggest Brian Lenihan reduce rather than increase VAT rates in his Budget - an increase of half a per cent in the top rate of VAT kicks in today. Coupled with the 2.5 per cent short-term cut announced by Britain's chancellor of the exchequer last week, the VAT disparity will inevitably encourage more consumers from the Republic to shop up North and online.

A POLL ON irishtimes.com last week asked whether it was fair of our politicians to ask us to forgo better value in the North or overseas in order to support the Republic's retailers during the recession. The answer was a resounding No. More than 1,200 people voted, with 69 per cent of them flatly rejecting calls to shop at home in favour of seeking out bargains online or across the Border.

While the poll was not scientific, it did provide an interesting snapshot of views. "To ask consumers to forgo better value in the North or overseas in order to support the Republic's retailers during the recession is akin to letting the Republic's retailers think that it's okay to charge excessive prices for consumer consumables and durables, prices above their true value and worth even after adding the retail premium," wrote Conwyn Glendyr. Another reader identifying themselves only as Sick Of It, was even more strident. "Irish stores have been ripping us off for years. Our own Government is making our decision to shop north for us by increasing the VAT . . . Head north young man, as soon as the pinch is felt here the retailers will drop their prices."

Tom McFee accused retailers in the Republic of continuously overcharging the consumer. "The whole concept of free markets in Europe is that the consumer can shop with his/her feet and go where the price is best. Just last week, I had to buy an item being offered here in Ireland at three times the UK price. I went and bought it online in the UK. Enough said about rip-off retailers!"

ANOTHER READER, Laura, had "no sympathy for either the southern retailers who gouge consumers or for the Irish branches of UK retailers who routinely add 25 per cent to the UK RRP and expect Irish consumer to just pay it. Irish taxes are on the way back up again and it's a reasonable form of protest. After all, the exchequer is now taking more money out of people's pockets than ever, thus leaving us with little choice other than to choose the cheaper option. It's not just the North though, it's buying online, buying in duty frees, skipping the price-gouger shop and buying elsewhere. Consumer rights have long since been dead in this country and it's high time people started demanding a better deal."

There were some dissenting voices. "Just remember that your child benefit, your granny's medical card, and your own dole are not paid by [the British] government. Every cent you spend in Northern Ireland contributes to the VAT returns of the London government," said Peter Buchanan.

Dermott Jewell of the Consumer Association of Ireland says that while he understands where the people calling on consumers to shop local are coming from, he believes they might be better off trying to get the retailers who operate on both sides of the Border to lower their prices in the South rather than putting pressure on already hard-pressed consumers. "Consumers are trying to do the best they can with what little they have," he says. "Morally we have a duty to ourselves and to our families and to suggest people are wrong to look for the best value, wherever that may be, is wrong."

He believes the stores which operate on both sides of the Border, but charge wildly different prices in the two jurisdictions, have a real case to answer. "The much lower sterling prices include a profit margin, which means that big retailers have a good deal of room to manoeuvre in their euro prices. The big retailers are putting ever more pressure on their suppliers in the South but they are not passing on the cuts."

Dublin's Lord Mayor told Pricewatch she was not defending retailers with her comments about shopping local, but trying to protect the frontline services she said would be threatened by a fall-off in rates if businesses went to the wall. Ultimately, she says, ordinary working people will suffer if big retailers scale back or shut down. She says the owners and top executives of the big retailers "are never going to have to take the hit. It will always come down to the ordinary people working for them."

She stresses the need for the Republic's retailers to keep their prices competitive. "I am calling on businesses, particularly those who do business on both sides of the Border, to explain why there [are] such discrepancies between their prices north and south. There are certain shops in Dublin that have a case to answer."

If they have not answered to Government, the National Consumer Agency, the media or their millions of customers by this point, it is unlikely they will answer the Lord Mayor's call.

Conor Pope

Conor Pope

Conor Pope is Consumer Affairs Correspondent, Pricewatch Editor