IRISH CONSUMERS are paying a mark-up of 51 per cent on goods such as clothing, houseware and electrical goods compared to UK prices, according to a new survey by the National Consumer Agency (NCA).
The margin on a basket of 45 non-grocery items purchased in 11 stores is even greater than the 30 per cent price difference for grocery prices on both sides of the Border recorded in an NCA survey published last year. The euro is currently worth about 7 per cent less than sterling.
An all-party Oireachtas group yesterday visited Dundalk to see the effects of the cross-Border shopping exodus on the town, where Superquinn recently announced it was closing its store.
The biggest mark-up found by NCA officials was on a Laura Ashley cushion costing £28 sterling but €49 in the Republic.
In Argos a 32” Hitachi television costs £372 but is marked up to €586. A patio set is marked up from £717 to €1,052 here.
Other items with big mark-ups included a Miss Selfridge dress at £60/€91, a Monsoon girl’s dress at £50/€78, and five pairs of Marks and Spencer socks at £5/€7.50.
NCA chief executive Ann Fitzgerald said its research also showed that retailers had made huge efforts to disguise or scratch out the sterling price where this appeared on goods imported through the UK.
She told a Checkout retailing conference yesterday that the NCA had been seeking explanations for the past nine months from retailers for the huge price differential that existed between here and the UK.
Various excuses had been offered. It was always “someone else’s fault”. The first excuse related to hedging costs on advance purchases, but she said this did not “wash” anymore.
Minister for Enterprise, Trade and Employment Mary Coughlan again called on retailers to explain the price differentials between North and South. “While clearly the cost environment in the South is having some impact on retail prices, it does not explain the reality of the magnitude of the North-South price differentials that continue to exist.”
She said a significant number of retailers had yet to reflect the benefits of the euro’s appreciation and had failed to give any credible reasons for the differences in price.
When it was put to her that she had expressed these concerns before, Ms Coughlan said she wanted to proceed by consensus but if prices were not reduced she would have to consider a legislative response.
Ms Fitzgerald said retailers had argued that it was more expensive to do business in the Republic. The recent Forfás report had put the extra cost at 5-6 per cent but even a difference of 10 per cent in costs “doesn’t go anywhere towards explaining these differences”.
She cited a number of recent examples of price mark-ups provided to her office, including a 40 per cent difference between North and South on the price of furniture and a €600 margin in the price of camera equipment quoted by two different retailers in Dublin.
Ms Fitzgerald said she was stunned by the results of the NCA grocery price surveys, which showed that retailers were “in a comfortable place” and were price-matching rather than competing on price. Some retailers has suggested the agency was “upsetting the natural order of things” but she saw this as her job.
She questioned whether retailers were looking for unrealistic rates of return on sales. Was someone squeezing everyone else, perhaps to keep shareholders happy? Were Irish prices being set in the UK or by local management?
“Whatever the approach, a change in approach is needed.”
Retailers who gave their customers a fair deal with good service would win custom, she predicted. Consumers were happy to shop locally and to pay an acceptable premium for doing so, but they did not want to be ripped off.
