Derry shops are grabbing millions of euros from their southern counterparts as customers flock to the city to do their Christmas shopping.
People across the border are coming to Derry to spend more with an average 4.7 per cent increase from last year, according to global financial company, Experian.
Figures released by Experian show consumer spending in Letterkenny, Cavan Town and Du
ndalk is down on average 5.6 per cent since last year.
Conversely, consumers from these three catchment areas are spending on average 4.7 per cent more in the neighbouring Northern Ireland retail centres of Derry, Enniskillen and Newry respectively.
Derry was pitted against Letterkenny in an impact assessment which found Derry’s retail centres were benefiting from the stronger euro, price differentials and lower VAT due to thousands of southern shoppers spending their money in the North.
An impact analysis map created for Derry and Letterkenny showed that, in relation to market share, Letterkenny saw a four per cent reduction in spending from within its own catchment area, while Derry had witnessed an increase of 5.3 per cent spending from the same catchment area of consumers.
Jonathan De Mello, director of retail and property at Experian, said: “Irish footfall figures have decreased by up to eight per cent this year whilst Northern Irish footfall has increased by up to seven per cent. Irish retailers, already weakened by higher operating costs, rising rents and higher VAT rates have to contend with the exodus of approximately 250,000 households who continue to travel to the North in search of a bargain and recent reports have estimated that cross border shopping is going to cost the Irish Exchequer up to €430m in lost revenues.”
“Christmas is typically a time when spending soars, however in the current climate of deflated consumer confidence, retailers are going to have to target consumers strategically, identifying exactly who they are, how their spending habits have changed and how they, as retailers, can meet their changed needs.”
Experian's analysis technique calculates the amount of comparison goods expenditure a centre is likely to attract given the strength of its retail offer and the levels of competition around it.
