What's the story with shops ignoring the strong euro?
Lately, while it may be more of a mathematical challenge, £1 is generally closer to €1.25, meaning UK products should be even more affordable for Irish consumers. Yet a stroll around a number of high street outlets might lead you to believe otherwise, especially where products display the euro and sterling prices side by side.
It's not just British companies either. In Dunnes Stores, a cardigan priced at £10 is currently retailing at €15 in Dublin shops, with other items showing a similar differential that fails to reflect the changes in the value of sterling against the euro. In the case of men's jeans, the euro price reflects an even higher hike, at €25 to £15, giving the customer a mere 60 pence to the euro. It may seem like a small difference, but in this case, the product is costing over €6 more than it would in a British outlet.
So, are shoppers doing the maths? According to Dermot Jewell of the Consumers' Association of Ireland, part of the problem is that, because the exchange rate had been relatively unchanged for so long, people are continuing to use the old rate as the basis for their calculations.
"Locked into the consumers' minds is the idea that if you're carrying out a basic calculation, the euro would be one and a half times the sterling rate, but what a number of them haven't thought about is that it's actually more like one and a quarter, and has been for about 14 months," says Jewell. Shoppers admit that they are unlikely to make even basic calculations, even in the case of dual pricing, where the sterling equivalent is displayed.
"I wouldn't often check the sterling price," says Louisa Kelly from Dublin, as she shops on Henry St. "I think it's kind of my own fault because I don't keep my eye on the exchange rates. It makes me angry but I have to accept some responsibility. I'd like to be more outraged, but I just buy something if it is within my budget. There is a blind trust there."
WHEN ASKED ABOUTtheir dual pricing system, and the question of whether customers are getting a fair deal given the weakened sterling, a Dunnes Stores spokesperson says the retail chain has "no comment to make on this matter at this time". Dunnes is only one of several retailers which employ dual pricing. British chain Marks Spencer still displays some items with both prices, although many now have their sterling price removed or covered by the euro price label. In one of its Dublin outlets, a £45 dress is currently retailing at €69, which works out at only 65 pence per euro, while a pair of silver shoes priced at £19.50 was selling for €30, even though the price at today's exchange rate should be closer to €24.50.
A spokesperson for Marks Spencer says: "The prices of our products are calculated on the exchange rate at the time we distribute them to stores. We are unable to update in-store prices daily as a result of changes in exchange rates." The company's argument is that it is hedging, deciding the currency rate for a number of months in advance at any one time and buying at that price.
According to Ann Fitzgerald of the National Consumer Agency, this excuse can only go so far. "There are very few retailers who hedge for a year - it's usually only for a few months," she says. "This has been running since last autumn and it's now May." In other words, the reason offered, that the shops in question have bought their products in advance, at a different exchange rate, no longer holds water almost a year down the line.
Jewell agrees this kind of rationale is no longer a viable excuse for the price hikes Irish customers are absorbing. "The retailers said they have to buy so far in advance they lock in the prices, but they've been saying this for the past 12 months. It doesn't cut the mustard," he says. "If that's the case then why can they not just simply re-label? It only takes a handgun to do it, it's not rocket science. But no, they've firmly resolved to take as much profit as they can."
FITZGERALD POINTS OUTthat the euro price displayed beside the sterling price on many items available in Ireland does not represent a simple currency conversion. "The euro price is never a conversion price, it's a function of doing business in Ireland, plus what they think we will be willing to pay," she says. "There is no price control in Ireland, it's a free market. The ultimate price control is with consumers and how they spend their money."
Consumer associations and agencies can only do so much in a situation where retailers are entitled to charge what they think people will pay. "They're not breaking any laws, it's a market economy," says Jewell. "It's what the market will bear. So long as the consumers are happy to bear those prices, it's going to continue. As long as we keep giving it to them, they'll keep taking it."
People "have the power in their wallets, and they can make choices," says Fitzgerald. "There's no obligation on us to pay exorbitant prices. The more people power we exercise the more realistic prices we will have."
Fitzgerald advises those who feel they are paying too high a price in euro compared with the sterling equivalent to let the retailers know of their dissatisfaction, and then take their custom elsewhere. Where people have a choice, "if they feel the differential is too much, tell the manager and walk away.Look for an alternative shop in Dublin or buy online. Unless we take charge and we drive competition, it's not going to happen.
"People should recognise the power they have and exercise it."
