Kathy Foley

August 10th, 2008

Forget the craze for Aldi and Lidl. As every recessionista worth their salt knows, the only place to go shopping is in Northern Ireland. You can see it every weekend as all roads north are clogged with shoppers seeking bargains. Most of those spinning back down the M1 with bootloads of cheap groceries don’t realise, however, that they are following a proud and long-standing tradition.

If this were a film, we would now have one of those horizontally wavy fades, from the super-bright, high-definition present, to a softly lit, grainier Ireland. It’s a Sunday afternoon in 1972 in Jonesborough, a hamlet just on the northern side of the border. Hundreds of southern-registered Cortinas and Datsuns are parked on one side of the border, while their occupants are at the market on the other side. What are they buying? Mainly butter, oddly enough.

“Oh yes, butter was the big thing,” said my father, when I called him to find out more. “It was a lot cheaper in the north, maybe half the price. You’d go up, buy a box of Cork & Kerry Creameries butter, bring it back to Dublin and give it to people. They would go up another time and bring you back butter.”

While butter was the big draw (and I can’t even begin to describe how hard that is to understand for someone born in the late 1970s), people bought other things too. “They had a lot of electrical goods,” recalled Dad. “You would often see fellas running across the fields with televisions, kettles, toasters — anything they could bring back into the south. They went across the fields to avoid the customs, but sometimes you’d see the customs fellas running after them. They never got your parents’ butter, though.”

Even though I’m still coming to terms with the realisation that my parents were involved in the trade of contraband dairy products, I can empathise. Times were hard, budgets tight and people did what they could to get by, which is what’s happening now. According to the Financial Regulator, 37% of people find it hard to make ends meet.

The difference is that, back then, cross-border shoppers were called “smugglers”, but now they’re known as “euro tourists”. Shoppers from the republic spent €8.7m last year in Belfast alone, up by a fifth from 2006. State-owned Bus Eireann even lays on a special twice-weekly bus from Dublin city centre to an outlet centre in Banbridge, Co Down, to cater to budget-conscious day-trippers. According to recent reports, the number of shoppers from the south is up 35% this year at the Foyleside Shopping Centre in Derry and up 40% at the Buttercrane Shopping Centre in Newry.

One shopper from Rush, Co Dublin, told the Belfast Telegraph last week that those in the know go early: “I’ve been to Sainsbury’s in Newry late some Saturdays and shelves were stripped bare. The car park is always full of cars with southern registrations.”

Increased purchasing power is one of the factors driving shoppers northwards — a euro buys about 78p now, whereas a year ago it was worth just 67p — but the primary cause seems to be boiling resentment at rip-off Ireland. Griping about high prices has been commonplace for years, but now the recession is biting, consumers have decided to put their money where their mouths are.

And there are serious savings to be made. In a cost survey released in June, the National Consumer Agency (NCA) found up to a 31% difference in the price of a basket of goods between north and south. Butter wasn’t in the basket — presumably the NCA is more mindful of its arteries than my parents were — but Move Over Butter was almost 53% cheaper in the north, while Kerrymaid Dairy Spread was 35% cheaper.

The NCA reckons the average grocery spend for Irish households is ¤150 per week, which equates to €7,800 a year. Save 30% on that and you pocket more than €2,300. Even allowing for the cost of petrol for a trip every month or two, the savings are substantial. So it’s a no-brainer for those near the border.

Retailers in the republic, never short of an excuse for their high prices, argue the cost of doing business is far higher in the south than in the north. Consumer advocates disagree, however. Michael Kilcoyne of the Consumers’ Association branded this defence as “nonsense”, while Ann Fitzgerald of the NCA pointed out that the difference in price of own-brand goods either side of the border is much lower (between 11% and 17%), implying retailers simply jack up the price of branded goods in Ireland, knowing that most consumers will plump for them in preference to yellow-pack products.

Mary Coughlan, the tanaiste and minister for enterprise, said last week that she has asked Forfas to look into the cost of doing business north and south. Its report, due for completion next month, will probably make uncomfortable reading for the supermarket multiples, as it is likely to confirm the suspicions of consumers that they have long endured an “Irish premium”.

Meanwhile, as consumers rejoice at the savings they can make on Move Over Butter and the rest, there is a downside to the great northern shopping exodus. Last week, Dan McLaughlin, the Bank of Ireland economist, said the 30% increase in the amount spent by Irish people shopping outside the jurisdiction was beginning to have a “material effect” on the economy.

Retailers don’t need McLaughlin to tell them this. In the first three months of this year, footfall was down 2.1% in Irish shopping centres, down 12% on Grafton Street and down 9% on Henry Street.

Closer to the border, it’s even worse. In Dundalk, many businesses have simply shut up shop. One local commented to The Mirror: “The town is dying around us and there’s nothing we can do about it. Dundalk is like a ghost town now compared to how it used to be, no one shops here anymore. Why would they when they can get everything cheaper just 10 miles up the road?”

Just as consumer spending stimulates growth, every euro that is unspent in this jurisdiction has a negative knock-on effect. So here’s the dilemma: are the savings we can make by shopping in the north worth job losses and further strain on our already teetering economy?

My parents stopped going to the Jonesborough market in the 1970s, when they decided the unnerving presence of British army patrols was too high a price to pay for cheap butter. Now those patrols are gone, what will it take to stem the flow of euros northwards? Lower prices, perhaps?