Right! Let’s get one thing out of the way here. I don’t think we needed the fuckers* to tell us last week that things were cheaper in Northern Ireland relatively speaking than they are down here. We’ve been travelling north for our shopping in our droves. We’ve been stocking up on our Christmas treats and booze, and our all year round weekly shopping in Newry, and Derry, and Enniskillen and all points just over the border for years. Did we really need our National Consumer Agency to spend our money on a survey to tell us what we already knew?
I had this composed immediately after the initial press release and newspaper coverage, but I decided to hold fire just in case something different happened after this recent survey compared to the non-events that followed the other press releases telling us the blatantly bloody obvious from the National Consumer Agency.
Well, there were a couple of days of hoo-haa, people shouted, there was gnashing of teeth, and general disquiet. And then, nothing. Nothing changed. No one did anything. Everything stayed the same. I’d have to agree with An Fear Bolg who commented on Pricewatch earlier today – “the NCA seems to be on a crazed campaign that may yield little or no results.”
So, we didn’t really need the National Consumer Agency to travel to Newry or Enniskillen or Banbridge to buy baskets of 42 items and compare their prices to the same 42 items bought in Rathfarnham, Blanchardstown and Finglas. This is the same useless regulator who has 70,000 calls to their complaints line in 2007, yet only made 7 prosecutions during that year.
The full details of this pointless research is available here if you want to read more.
There is some useful background information on the application of VAT and Excise rates both here and in Northern Ireland. There is also some interesting information on the differences in rates applied to different products covered in the survey. However, it should also be noted that the price comparisons were made after the exclusion of the impact of VAT and Excise rates.
I just have a few of observations:
- On the same day as the fuckers* released their research results, it was revealed by the CSO that an average basket of goods costs 5% more in Dublin than it does in the rest of the country. All of the Northern based supermarkets chosen for this current research can easily be described as “country based” – Newry, Enniskillen and Banbridge. Yet all the supermarkets visited down here were Dublin based. I guess it’s reasonable to assume that a similar city (Belfast) vs country divide is just as applicable up there as it is down here. So, let’s assume we add 5% to the northern prices so that we’re comparing like (city = Belfast) with like (city = Dublin) – the “headline” figures from the National Consumer Agency now drop by 5%.
- Now, let’s look at the price of wages down here compared to Northern Ireland. There’s no mention of this comparison of this in the National Consumer Agency report. Lets assume that the majority of employees in these stores on a fulltime basis are aged 22 and over. The minimum hourly wage in Ireland is, as of July 2007, €8.65 per hour. The equivalent national minimum wage in Northern Ireland is £5.52 per hour. That’s a Euro equivalent of €6.99. Therefore the cost of labour in Ireland is 24% more expensive than it is in Northern Ireland. I guess that’d be a good reason for things to be more expensive down here than up there.
- What about the price of property – to either buy or rent? Do you think the cost of having a retail premises in Finglas, Blanchardstown or Rathfarnham is equivalent to having one in Banbridge, Enniskillen or Newry? If we look at house prices, which everyone is familiar with – a 4 bed, 2 bath detached house with garage in Newry would cost you upwards on €650k while a similar type house in Rathfarnham would cost you double that. A recent CBRE survey on the cost of renting office property showed that Belfast had a rate of €304 per sq metre, while Dublin had a rate of over twice that amount at $860 per sq metre. And on top of that, our comparison shops up north are based in areas there are probably even cheaper to rent – and all in a market where rental rates are falling in the north, while they’re pretty stable down here, over the past 12 months. Again, a legitimate reason for prices to be more expensive down here.
However, we also know that Irish shoppers are more strongly tied to branded items than many of our European neighbours, and as such, we will naturally pay a premium for wanting these branded items. But that’s our choice – we’re not forced to buy these items, but we like them and we chose to.
I’ve written many times before about this whole euro sterling pricing differential, and each time my message is the same – no matter what retailers or regulators or governments are telling us, the one main factor that will in the long term influence the prices is the shopping behaviour we ourselves follow.
Irish based retailers will claim that the cost of doing business in Ireland is what causes the price differential we all know and see. While not trying to become an advocate for these businesses, I think that above 3 examples show how this can be somewhat justified.
Shouldn’t this type of information also have formed the basis of the research these fuckers* are carrying out in order to give us the full picture of what’s going on and the reasons behind the price differentials.
Unfortunately, we already know that all this is going to yield no results after the comments of John Shine, the NCA director of commercial practices “admitted there is little the organisation can do to help consumers get better value.” Well, apart from wasting time their time doing half arsed, incomplete and pointless research for crowd and press pleasing press releases.