Saturday, April 25, 2009

Sterling efforts are paying off!!

Ever since sterling started to weaken in early 2008, there have been lots of stories about the huge differences in the price of groceries, clothes, electronic goods etc between here and the UK, but especially Northern Ireland. Initially we were told by retailers that it would take 3-6 months before the currency fluctuations would reach the shop floor. Of course that didn't happen!

The laws of the market dictate that retailers will charge what they think the buyer will pay. Perhaps during the boom people were willing to flash the cash, of course that has changed now for many people. In particular what really cheeses off people is the fact that products had a sterling price displayed which when compared to the equivalent in euros was much cheaper.

The constant commentary and criticism won't go away and more importantly the flood of consumers across the border will cost retailers in the long run, both in terms of business and reputation. Tesco admitted as much this week. And the state coffers are suffering too, the Revenue Commissioners estimate it could be costing up to €700m. It has taken a while but I think retailers are beginning to respond, they have too. Tesco started the ball rolling last month, but we have a long way to go.

Fresh beef for sale in Ballinrobe...a very moooving story!

The focus has also shifted to other products and services, and in recent weeks I was contacted by a few people about the major difference between the sterling and euro prices of the same accommodation, at the resorts on and in France. When I checked earlier this week there was a significant difference in the prices available on the two sites. Aideen Sheehan did an excellent piece on it in the Independent during the week, hopefully the exposure of the price differential will lead to a review of the Irish prices! I also think that the continued attention on what is referred to as "the Paddy Tax" will force retailers and businesses throughout the economy to focus on delivering more value and drive down prices further.