Today the CSO published a major report on the extent of cross border shopping. They calculate that shoppers here spent about €435m in Northern Ireland between June 2008 and June 2009. They provide details of the numbers of households travelling north, the regions they are from, the amount they are spending and what they are buying.
Given all the hullabaloo about cross border shopping, it is good that we have independent and extensive data on which to make conclusions and of course to enable the Government to make the right decisions in response to what they see as a problem. I accept that cross border shopping is costing the State revenue, which of course pays for public services. However cross border shopping is a world wide phenomenon and as even the CSO and Revenue report in February noted it was not a new phenomenon here. I would argue that cross border shopping is actually a good thing for our economy as a whole in the long term, because it will force retailers to adjust their prices to retain customers fleeing to the North to escape high prices. That will be good for consumers and competitiveness.
- 80% bought groceries on their most recent trip, while only 44% bought alcohol.
- Of the average household spend on cross border shopping of €286, only €32 or 11% was spent on alcohol, not the vast sums we are lead to believe.
- Consumers from the border region are the key group where business is being lost, they are more likely to travel to Northern Ireland to shop and more regularly-41% of border households compared to national average of 16%.
- They are also frequent cross border shoppers, 5.9 trips on average in the last year compared to the 1.1 trips national average.
- Border shoppers are primarily going North to buy groceries, they had the lowest spend on alcohol and the 2nd highest spend on groceries.
This suggests in my view that even if the Government reduces excise on alcohol, it will have limited impact on cross border shopping. The key driver is the high cost of groceries. So if excise on alcohol is reduced, we could end up with a scenario where the State will lose further revenue and cross border shopping will continue. If the Government want people to spend more here and travel North less, then they need to address the price of food and groceries. The idea that reducing excise on alcohol is the magic bullet to stop the flow of cross border shopping is misguided.