TEXT OF STORY
Kai Ryssdal: The dollar took a bit of a beating on foreign exchange markets today. The prospect of an end to the global recession has traders moving away from the tradition safety of the greenback.
On the border between the Republic of Ireland, and the British province of Northern Ireland, the currencies in question are the pound and the euro. And that has Irish shoppers eager for a bargain who are using the exchange rate to their advantage. Christopher Werth reports.
CHRISTOPHER WERTH: Crossing the border from the republic of Ireland into Northern Ireland is a lot easier now than it used to be. Eunan McConnell remembers a time when armed soldiers patrolled. But nowadays, if you weren’t cruising around with a local, you’d be hard pressed to point out exactly where the border is.
EUNAN MCCONNELL: We’re coming up here now, that’s the checkpoint. It would be usually about here, and that’s where you’d be searched there. Sometimes a quick search, away you go. Other times you’d be held up for ages.
One easy way to find out which side of the divide you’re on is to simply check a price tag. People from The Republic pay their bills in euros. Northern Ireland uses the British pound. Shoppers coming North have seen the value of the Euros in their wallets rise by as much as 30 percent against the pound in the past year.
So Northern Ireland is cheap for bargain hunters like Mayve Devenny, who drives from her home in the Republic to save money at this shopping center in Derry, Northern Ireland, a city right on the border.
MAYVE DEVENNY: It’s about an hour and 20 minutes in the car, and we come here for groceries and for clothes and for even furniture and televisions. It’s a lot cheaper.
Taxes are another factor pulling Devenny north. Just as Ireland decided to raise its value added tax, the UK lowered its own in order to boost consumer spending.
Donald McFetridge teaches business at the University of Ulster. He says the Republic now has some of the highest prices in Europe. Groceries costs alone are 28 percent lower in Northern Ireland, and as a result, parking lots here are full of cars with southern license plates.
DONALD MCFETRIDGE: And it used to be, you know, even say five, six years ago you wouldn’t have seen that number of cars.
All those extra shoppers may be worth about $1 billion to
Northern Ireland’s economy this year.
But what about businesses on the other side of the border?
MCFETRIDGE: Some people will tell you that the south has suffered a great deal as a result of this.
Paul Bradley is busily stocking the produce shelves in his small grocery store in Buncrana, a quiet, coastal town just outside Northern Ireland. He says times are tough for his workers.
PAUL BRADLEY: I’m 30 years in the retail trade, and it’s the first time in my life that I remember actually having to go along to people and sort of say, look I’ve got to cut your time and your working hours.
Bradley says business is down 20 percent in the last year-and-a-half,
and he’s started buying more stock from Northern Ireland, and even as
far away as England, to pass on the savings to his own customers.
Luckily he can still count on loyal shoppers like Ilene McDade.
ILENE MCDADE: I personally wouldn’t go across the border to do me shopping. I work here in the Republic, so why go across the border? I mean, I’m putting myself out of a job.
That’s a sentiment shared by Ireland’s Finance Minister, Brian
Lenihan, who’s urging shoppers to stay closer to home. It’s estimated
Ireland will lose over $200 million worth of tax revenue to
cross border shopping this year. That’s a lot for a country facing one
of the worst recessions in the developed world.
But with the pound gaining some ground against the Euro over the past
few months, some of the allure of the north may be wearing off. That
could be bad for Northern Ireland’s economy, and not so good for shoppers from the south either.
In Derry, Northern Ireland, I’m Christopher Werth for Marketplace.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.