We’ve been many times in the past when we’ve seen a mass exodus of shoppers from Ireland into Northern Ireland – particularly in the run-up to Christmas – just because stocking in Newry was so much cheaper than the local stores.
But is today’s trip north a way for families to squeeze their savings from their weekly shop?
What is in the basket?
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To try and compare prices, we picked a few groceries fairly everyday in Dundalk, then take a road trip to Newry to see how the price varies.
In the basket was some bread, milk and eggs, as well as some pasta, chicken, vegetable oil and toilet rolls…
There is also a “luxury” item – a bottle of Prosecco.
For the sake of comparison, the prices were on the exact same products at the same retailer.
The prices were also the standard rates – so no specials, discounts or deals were taken into account.
After that the big variable is the exchange rate – which of course changes every minute.
To make matters more complicated, the price you see on the app isn’t necessarily the price your bank would give you when you buy something on the other side of the border, nor is it necessarily the price the retailer you were dealing with when it was importing products.
So to try to iron out any sudden changes, the rate used here was an average of the last month.
So which side was the cheapest?
What is interesting is that there is no general trend. Neither side of the border has been consistently cheaper than the other.
In fact, it was a rather mixed bag.
Some products were cheaper in Dundalk, others were cheaper in Newry, and in general, the price of everyday items was pretty much balanced.
But there are some important differences hidden within it.
What products had the biggest difference in price?
When it comes to eggs and milk, it is actually somewhat comparable.
The price of a liter of whole milk from his own brand was 1.05 euros in Dundalk and was equivalent to 1.10 euros in Newry. So I cherish quite a bit, but not by much.
The eggs I bought at Dundalk were 8% more expensive than their counterpart at Newry, though, so you lose about 15°C on six eggs with a significant free range.
Meanwhile chicken was 30% more expensive in Dundalk.
why is that?
There are two general factors that may have an impact – for example, VAT is slightly lower in Northern Ireland than it is in Ireland; Business rates are lower, too.
A benefit is also likely to come from “economies of scale” – the fact that retailers in the North are part of a huge chain in the UK, compared to a relatively small company in Ireland.
So if a UK retailer goes looking for a chicken supplier for the whole group, for example, they place a much larger order – giving them more leverage in the price they pay per kilo.
They will also likely have more suppliers to negotiate with than they would when the Irish company is looking for an Irish product.
But perhaps the most important factor is how competitive the grocery market is in Northern Ireland.
In the Republic there are the Big Three – Tesco, Supervalo and Den – as well as Aldi and Lidl discounts. Together, they account for about 91% of our total grocery spending each month.
But in Northern Ireland there are Tesco, SUPERVALU, Dunnes and Lidl; Plus Asda, Sainsburys, Morrisons, Iceland and Co-Op.
And when you have a small market with a lot of competition that helps keep prices down, especially in terms of everyday essentials that almost all shoppers pick up when they enter the store.
But despite the many reasons Northern Ireland is cheaper, there are often cases where it is not.
Bread was one of the staples that was much more expensive in Newry than in Dundalk.
The size of the white pan was 90°C in Dundalk, and the equivalent of €1.33 in Newry… almost 50% higher.
You might have assumed it would be the opposite, especially since a lot of the flour used to make bread here comes from the UK, and therefore subject to post-Brexit tariffs.
But what can skew this is the supermarket’s love of the so-called loss leader.
This is where they sell a basic product – such as bread or milk – at cost or even at a loss, as a lure to shoppers.
The hope then is that they will continue to spend money on other products while they are there.
What other products cost more in Northern Ireland than in the Republic?
The pasta had the biggest difference in price out of all the necessities checked.
In Dundalk, 1 kilogram of dried spaghetti was 1.09 euros, while in Newry it was 1.79 euros… which is 70 cents, or 64% difference.
What we see here is likely the impact of Brexit – because durum wheat, which is used to make pasta, generally comes from Italy and France.
Because of Brexit, a British company that buys Italian products is now facing additional costs and tariffs, and this aims to explain why pasta is so expensive in the UK.
In theory, the Northern Ireland Protocol should allow Northern Irish retailers to avoid tariffs on Italian goods, but if they are imported into mainland Britain by a British-registered company, avoiding them becomes more difficult.
It is the same story for vegetable oil.
The vegetable oil here consists almost entirely of rapeseed oil – produced by the United Kingdom.
However, there have been significant harvest issues there in recent years and – due to Brexit – supplementing their production with oil from places in the EU has become much more expensive.
As a result, the price in Newry was 45% higher than in Dundalk.
You pay 1.39 euros per liter in Dundalk, but more than 2 euros in Newry.
So when you put it all together – what are you spending?
The cost of these seven items together was €20.15 in Dundalk.
The price for the same items at Newry was about €18.72 – a bit cheaper to the order of €1.40, or 7%. Perhaps not enough to get people to head to the border en masse.
However, these comparisons are largely based on private label goods. When it comes to a number of branded products, Newry has been steadily cheaper.
A large bar of famous chocolate was 33% cheaper at Newry, for example, while a multiple pack of chips cost 21% less.
Both are British brands, which may be part of the reason for this.
Elsewhere, a diaper tray was about 8% cheaper, while a box of detergent was 23% cheaper.
Meanwhile, a box of a well-known brand of men’s deodorant was 48% cheaper at Newry—almost half the price.
And there’s another item in the cart that we haven’t talked about yet—our luxury item, prosecco.
What’s the difference there?
The bottle in question is basically a Prosecco brand bottle – it’s made specifically for retailer used, so it’s not a high-end option by any means.
In Newry it costs just under €10 – €9.82, to be exact.
In Dundalk, it costs 20 euros.
That’s twice the price for the exact same bottle of sparkling wine.
Why is there such a big difference?
There are two factors at play.
To start with, Ireland’s tax is a bit higher than the UK fee.
It’s a little higher for beer, but much higher for spirits and wine.
In the case of this bottle, the percentage is about 19% higher – if it was a stronger wine, it would be about 26% higher.
For lives, there is a 22% difference in the applicable tax.
This higher tax rate is on top of the slightly higher value-added tax rate mentioned earlier.
But the other big factor is the minimal unit pricing.
This is a rule that took effect in Ireland at the beginning of the year, and means that retailers cannot sell alcohol for less than a certain price, which depends on how much alcohol is in a can or bottle.
There is no equivalent law in Northern Ireland at the moment, although there have been consultations about introducing one.
At €20, this bottle of Prosecco is well above the minimum price – but one effect of the lower price is that it seems to push the other prices higher.
This is, in part, because brands may not want to be in the same price category as a cheaper option, and partly because they simply can – the higher price will not seem out of place now.
It’s not just Prosecco where there is a difference. It’s across the board at the alcohol line.
A can of 20 bottles of popular beer is about 35% cheaper in Newry, a bottle of vodka is about 23% cheaper.
Will that be a concern for retailers?
It’s almost certain – a lot of retailers in Ireland will be nervous about that price difference, especially as we approach Christmas.
As we know, people often stock up on alcohol in the run-up to Christmas – and retailers usually respond to this by increasing the amount of alcohol they stock. They bring in big slabs of cans and also give specials on different products like spirits and wine.
But they won’t be able to do that, certainly not to the same extent this year.
For example, while a large drawer of cans is usually a Christmas standard, at least one retailer plans to dispense with them for the first time.
This is because it should be priced somewhere in the region of 40-45 euros – compared to the previous standard of 20-25 euros.
The assumption is that people simply won’t do it at that price.
But the fear would be that Republic shoppers might look north for stocking instead – and while they’re there, they might decide to do the whole Christmas shop too.
It might not be the cheapest, but if they’re already there, it’ll come in handy.
The only thing that may be in the interest of retailers in the republic at the moment is the high prices of gasoline and diesel.
After all, some may be crunching numbers and finding that the amount they’ll spend to take the flight and return cancels out any savings they would have made on their drinks when they got there.