Can you save money when shopping cross-border?

Many times in the past there has been an exodus of shoppers from Ireland to Northern Ireland – particularly in the run up to Christmas – simply because it was so much cheaper to stock up in Newry than at a local supermarket.

But is a trip up north today a way for households to squeeze a saving out of their weekly grocery shopping?

What’s in the basket?

We need your consent to load this rte-player contentWe use rte-player to manage additional content that may set cookies on your device and collect data about your activities. Please review your details and accept them to load the content.manage settings

To try and compare prices we bought some fairly everyday groceries in Dundalk and then drove up the road to Newry to see how the prices differ.

In the basket was some bread, milk and eggs, as well as some pasta, chicken, vegetable oil and toilet paper…

There is also a “luxury item” – a bottle of Prosecco.

For comparison purposes, the prices refer to the exact same products from the exact same retailer.

The prices were also the standard prices – so no special offers, discounts or deals were taken into account.

After that, the big variable is the exchange rate – which of course changes every minute.

To complicate matters further, the rate you see on an app isn’t necessarily the same as what your bank gives you when you buy something across the border, nor is it necessarily the price that the retailer requires employed when importing products.

So to try to smooth out sudden changes, an average price for the last month has been used here.

So which side was cheaper?

It is interesting that there is no general trend; Neither side of the border was consistently cheaper than the other.

In fact, it was a bit mixed.

Some products were cheaper in Dundalk, others cheaper in Newry and overall the price of everyday items is pretty much equal.

However, this hides some significant differences.

Which products had the biggest price difference?

When it comes to eggs and milk, it’s actually quite comparable.

A liter of own brand whole milk was €1.05 in Dundalk and €1.10 in Newry. So a bit more expensive, but not by much.

However, the eggs I bought in Dundalk were over 8% more expensive than the equivalent in Newry, so you’re losing about 15 cents for six large free range eggs.

Meanwhile, chicken was almost 30% more expensive in Dundalk.

Why is that?

There are a few general factors that could play a role – for example, VAT in Northern Ireland is slightly lower than Ireland; Business rates are also lower.

There is also likely to be an advantage from economies of scale – the fact that retailers in the north are part of a huge UK chain compared to a relatively small company in Ireland.

So if the retailer in the UK, for example, is looking for a supplier of chicken for the whole group, they will place a much larger order – giving them much more leverage on the price they pay per kilo.

They also likely have more suppliers to deal with than they would if the Irish company were looking for an Irish manufacturer.

But perhaps the most important factor is how competitive the food market is in Northern Ireland.

In the republic there are the Big Three – Tesco, Supervalu and Dunnes – as well as the discounters Aldi and Lidl. Together, they account for about 91% of our total grocery spending each month.

However, in Northern Ireland there are Tesco, Supervalu, Dunnes and Lidl; as well as Asda, Sainsburys, Morrisons, Island and Co-Op.

And when you have a small market with so much competition, that helps keep prices down, especially on the everyday basics that almost all shoppers take with them when they walk into the store.

But despite the many reasons why Northern Ireland would be cheaper, there are often instances where this simply isn’t the case.

A staple, considerably more expensive in Newry than in Dundalk, was bread.

A white cold cuts pan cost 90 cents in Dundalk and the equivalent of €1.33 in Newry… almost 50% more.

You might have assumed the opposite, especially as much of the flour used to bake bread here comes from the UK and is therefore subject to post-Brexit tariffs.

What might skew this, however, is the supermarket’s love of the so-called loss leader.

Here they sell an important product – like bread or milk – at cost or even at a loss in order to attract buyers.

The hope then is that they spend money on other products while they are there.

What other products cost more in Northern Ireland than in the Republic?

Pasta had the largest price difference of all essentials reviewed.

In Dundalk, 1kg of dried spaghetti was €1.09, while in Newry it was €1.79 – a difference of 70 cents or 64%.

What we’re seeing here is probably the Brexit effect – because durum wheat used to make pasta tends to come from Italy and France.

Due to Brexit, a UK company buying Italian products is now facing additional costs and duties, and this explains why pasta is more expensive in the UK.

In theory, the Northern Ireland Protocol should allow Northern Ireland retailers to avoid duties on Italian goods, but when they are imported into mainland Britain by the UK-registered company, avoiding them becomes much more difficult.

And it’s a similar story for vegetable oil.

Vegetable oil here consists almost entirely of rapeseed oil – which is produced in Great Britain.

However, there have been major harvest problems there in recent years – and because of Brexit, supplementing your own 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 a liter in Dundalk but over €2 in Newry.

When you add it all up, what are you spending?

The total cost of these seven items was €20.15 in Dundalk.

The price of the same items in Newry was around €18.72 – so a little cheaper, around €1.40 or 7%. Probably not enough to push people en masse to the limit.

However, these comparisons are largely based on store brand items. Newry was consistently cheaper across a range of branded products.

For example, a large bar of a well-known chocolate was 33% cheaper in Newry, while a multipack of crisps was 21% less.

Both were British brands, which could be one of the reasons.

Elsewhere, a pack of diapers was about 8% cheaper, while a pack of laundry detergent was 23% cheaper.

Meanwhile, a can of a well-known men’s deodorant was more than 48% cheaper in Newry – almost half the price.

And we haven’t talked about another item in the shopping basket – and that is our luxury item, Prosecco.

What was the difference?

The bottle in question is essentially a private label bottle of Prosecco – it’s made specifically for the retailer used, so it’s by no means a high-end option.

In Newry it cost just under €10 – €9.82 to be exact.

In Dundalk it costs €20.

So that’s double the price for the exact same bottle of sparkling wine.

Why is there such a big difference?

A few factors come into play.

First of all, Ireland’s excise duty is a fair bit higher than that of the UK.

It is slightly higher for beer, but much higher for spirits and wine.

This bottle is about 19% more – with a stronger wine it would be almost 26% more.

For spirits there is a 22% difference in the excise duty applied.

And that higher rate of excise duty comes on top of the slightly higher rate of VAT already mentioned.

But the other big factor is the minimum unit price.

This rule came into effect in Ireland earlier this year and means retailers cannot sell alcohol below a certain price based on the amount of alcohol in the can or bottle.

There is currently no such law in Northern Ireland, although there have been consultations on the introduction of one.

At €20, this bottle of Prosecco is well above the reserve price – but one of the effects of the reserve price is that it seems to have pushed up other prices.

That’s partly because brands may not want to be in the same price bracket as the cheapest option, and partly because they just can – the higher price won’t look so out of place now.

It’s not just Prosecco where there’s a difference. It’s across the board in the alcohol line.

A case of 20 bottles of a popular beer was about 35% cheaper in Newry, and a bottle of vodka was about 23% cheaper.

Will this worry retailers?

Almost certainly – many retailers in Ireland will be nervous about this price difference, especially as we head towards Christmas.

As we know, people often stock up on alcohol in the run up to Christmas – and retailers usually respond by increasing the amount of alcohol they stock. They bring the big platters of cans and also offer special deals on various products like spirits and wine.

But they won’t be able to do that this year, certainly not to this extent.

For example, while the large can tray is usually a Christmas standard, at least one retailer plans to forgo it for the first time.

That’s because they would need to be somewhere in the £40-45 range – compared to the previous £20-25 norm.

The assumption is that people just won’t buy them at this price point.

But the concern will be that shoppers in the Republic might head north to stock up instead – and while they’re there, they might decide to do all their big Christmas shopping, too.

It may not be cheaper, but if they’re already there, it will come in handy.

The only thing that could benefit dealers in the republic at the moment is the high price of petrol and diesel.

Finally, some might add up the numbers and find that the amount they spend on the round-trip fare negates any savings they would make on their drink by the time they get there.

Leave a Comment