Irish shoppers head north as pound dips

DUBLIN: Maureen Murphy drove up to Northern Ireland from Dublin to get some dental work done. She returned laden with food, wine and liquor. ���I can���t believe it, I���m shocked,��� said the 61-year-old homemaker, referring to the ���hundreds��� of euros she saved. ���It���s because of the pound,��� she said outside The Quays shopping mall in Newry, five miles from the Republic of Ireland border.

The pound���s 13% slide against the euro this year is luring shoppers north, amplifying a slump in Irish retail sales as the economy slips into its first recession in two decades. Now, the UK is about to cut sales taxes even as Ireland raises levies, adding to the woes of stores south of the border.

UK chancellor Alistair Darling will on December 1 reduce the country���s sales tax to 15% from 17.5%, just as Ireland raises its levy to 21.5% from 21%.

���It���ll compound the problem of people crossing the border to shop,��� said Torlach Denihan, director of Retail Ireland, a Dublin-based lobby group which represents store owners. ���The consequences for border towns will be very serious.���
Northern Ireland���s stores are already toasting sterling���s fall. In the centre of Newry, 66 miles from Dublin, the Buttercrane shopping mall has erected bright pink hoarding advising shoppers to ���Make your Euro go Further.��� Clothing retailer Jack & Jones is offering a foreign exchange rate of ���One euro = One pound.���

The pound fell to a record low of e1.1545 this month on concern that the Bank of England will cut its main interest rate more than the European Central Bank to counter the worst recession since 1991. A year ago, it was trading at around e1.40.

With the pound so low, ���how can you stop people going to Newry?,��� said Sharon McGuinness, 45, who works at The Christmas Shop in the Marshes shopping centre in the Irish town of Dundalk, and lives in Newry. ���Everyone���s going up there when I���m driving down��� to work.

At The Quays mall in Newry, 35 miles from Belfast, motorists line up at the entrance looking for parking spots among the 1,300 spaces. Many of them are filled by cars with southern registration plates.

Clodagh Linden, who manages Aldo Shoes at the mall, said Irish shoppers now account for as much as half of business, up from 20% to 30% earlier this year.