Shoppers from the Republic of Ireland spent an estimated 435 million euros in one year when flocking to cheaper stores on the UK side of the Irish border, Reuters quoted a survey as showing today. A mini-boom started among retailers in Northern Ireland border towns after the value of sterling fell by around 20 percent against the euro in the last two months of 2008. It has remained weak since then, trading at 90 pence on Friday. Finance Minister Brian Lenihan said that weakness had put pressure on Irish exporters and that he would take account of UK tax rates when presenting next week"s budget for 2010 intended at saving 4 billion euros. Lenihan increased value-added tax (VAT) in last year"s budget just before the UK lowered it and the Irish Business and Employers Confederation (IBEC) called for a significant VAT cut on the Dec 9 budget to help stop the outflow of consumers. "There should not be any further increases in taxation on consumers on budget day and the VAT rate should be reduced to 18 percent (from 21.5 percent) to stimulate retail sales," IBEC"s Retail Ireland Director Torlach Denihan said in a statement. The Central Statistics Office"s (CSO) findings showed that while the highest proportion of shoppers made short trips north of the border, about a third of all households who shopped in Northern Ireland travelled some 100km from the Dublin region. One in six households crossed the border to shop at least once in the year to June and spent an average of 286 euros per visit, the CSO said. Four-fifths bought groceries on their most recent trip, while almost one half purchased alcohol. Large retailers like Tesco began cutting prices south of the border in May in an attempt to remove the incentive for cross border shopping. However Irish workers caused traffic jams last week as hundreds made use of a one-day public sector strike to do some Christmas shopping. The CSO, which undertook the survey for the first time, added that one in five households which made a shopping trip in the period did not intend to make further trips in the following 12 months.
