Strong euro sends Irish food shoppers north of the border

The soaring value of the euro has further driven a wedge between the prices paid by consumers for groceries in the same supermarkets in the Republic of Ireland and in Northern Ireland.

A survey by The Independent of selected grocery items revealed that Tesco's prices for some items are more than two-thirds higher in the south, while the National Consumer Agency (NCA) in Ireland found that other grocers, including Dunnes Stores and Lidl, also charge substantially more for their products in the south than they do in Northern Ireland.

The price differential means that other rival supermarkets, such as Asda and Sainsbury's – which do not have stores in the Republic of Ireland – have witnessed a marked spike in traffic from south of the border this year.

A Sainsbury's spokeswoman said: "We have definitely seen a marked increase in the number of visitors we are receiving from across the border" at Sainsbury's stores in Northern Ireland. She added that the strengthening of the euro against sterling "is becoming an increasing factor in southern shoppers' decision to come to Newry" in Northern Ireland.

The higher prices can be partly attributed to the euro appreciating by around 8 per cent against the pound this year. But the NCA revealed in June that branded goods were 31 per cent more expensive at Dunnes in the Republic and 28 per cent more expensive at Tesco in the Republic. John Shine, the NCA's director of commercial practices, said: "While Southern retailers will claim there is a much higher cost of doing business here than in the North or the UK, we do not believe that a difference of anywhere near 30 per cent is justified. There are savings to be made for consumers by going across the border. With further appreciation of the euro in recent weeks, the NCA believes there is still scope for further reductions to be passed on to the consumer in the Republic."

The Independent's research found that Tesco's prices were 73 per cent higher for Andrex toilet tissue, 63 per cent higher for its own-label lasagne and 51 per cent higher for Marmite.

Tesco Ireland said: "Tesco has been leading the downward movement in prices in Ireland and has consistently been the cheapest in the market." Prices at the discounter Aldi were also found to be higher south of the border than at stores in the north.

A source at a leading grocer pointed out that the cost of doing business in Ireland is far higher than in Northern Ireland. For instance, wages in supermarkets are between 20 per cent and 30 per cent higher, VAT is 2.5 per cent higher and commercial electricity is double the price.

However, a further appreciation in the value of the euro could exacerbate the volume of consumers from the south heading north on shopping trips.

A Sainsbury's spokeswoman said shoppers at its Newry store, close to the border, can use the euro to pay and 30 per cent of them use it for cash purchases.

An Asda spokesman said: "A year ago, approximately 28 per cent of our weekly sales were paid for with the euro. Now, we are seeing over 40 per cent." Customer feedback indicated that, given how close some Northern Irish towns are to the border, "it makes a lot more sense to make the trip across to make their budgets stretch further."

Separately, it was reported yesterday that the Irish supermarket group Superquinn, which has 23 stores in the Republic, has received six expressions of interest from potential bidders, who are understood to include Asda and Sainsbury.