BELFAST BRIEFING:The strength of the euro is now a major business opportunity for North's retail sector

THE EURO has never been as welcome as it is today at checkouts in the North, which may help explain why retail is now the fastest-growing private sector in Northern Ireland. Latest figures show there are more than 82,000 jobs in the retail sector. This could grow by a further 12,000 by 2012 if several new proposed retail schemes such as the John Lewis development near Lisburn get the go-ahead.

Despite the credit crunch and the general downturn in economic conditions in the North, the retail sector appears not to be faring as badly as it is in some parts of the UK, where the high street experienced one of its worst summers in years.

Northern Ireland's public sector-dominated economy continues to support one of the region's favourite pastimes - shopping and what is now being termed as the "euro factor" is also coming into play.

There is no doubt that there has been a sharp drop in consumer spending in the North. Prices rises across the board from fuel to food and the dramatic fall in house prices have forced people to tighten their belts.

Evidence points to the fact that consumers are not only worried about their own personal finances but are increasingly concerned that general economic conditions are going to get worse. Car sales have stalled and new orders for "non-essential items", such as kitchens and conservatories, have dwindled.

The rise in the basic cost of living in Northern Ireland also means there is a lot less "social spending", which has hit pubs and restaurants hard. But some parts of the North, such as Derry, Newry and certain towns in Fermanagh and Tyrone, are being cushioned from the worse of the slowdown by the euro factor.

Thanks to sterling's dismal performance on the world markets in recent weeks, there has never been a better time for euro-wielding consumers to shop in the North. The euro's all-time high against the pound means consumers from the South are getting the best value yet - even with exchange rates considered - for their currency.

Two years ago the euro was worth on average 67 pence: now it is in the region of 81 pence.

Leaving aside for a moment the advantages and disadvantages this creates for other sectors in the North, the strength of the euro is now a major business opportunity for the retail sector. According to Janice Tracey, chief executive of Derry Chamber of Commerce, euro shoppers are helping to boost trade in the city.

Ms Tracey says retailers throughout Derry are reporting a major increase in the numbers of shoppers from the Republic. She says the city's pro-euro stance always encouraged cross-Border trade but consumers from the South now perceive there is better value to be had in Northern Ireland.

Depending on the purchase in question, consumers from the Republic could save as much as 30 per cent by doing their shopping in the North.

Derry's two largest shopping centres - Foyleside and the Richmond Centre - have both recorded a huge increase in the number of southern-registered cars in their car parks. Retail chiefs in the city now estimate that as many as four out of every 10 shoppers in the city may originate from across the Border on any given day.

But Derry is not the only euro-friendly town or city enjoying a boost from southern shoppers. Retailers, particularly large British multiples in Newry, Strabane and Enniskillen are also enjoying a euro-windfall at the moment.

Cathal Austin, the manger of the Quays shopping centre in Newry, estimates that the euro could now account for up to 40 per cent of all cash transactions at its stores. He believes that on Irish bank holidays, this figure could climb to as high as 50 per cent.

Supermarket giant Sainsbury is one of the stores where the value of the euro relative to sterling has played a major role in its success at the Quays. The Newry operation has become one of Sainsbury's best performing stores in the UK when it comes to off-licence and chocolate sales.

Sainsbury's says the strength of the euro over the last 12 months has resulted in a marked increase in the number of shoppers it attracts from the South.

Sainsbury is just one of a number of retailers that accept euro as payment. The retailer says it has seen an increase in the number of shoppers - now estimated to be around 30 per cent - that use the euro to pay for purchases at its Newry store.

Other retail giants from Belfast to Strabane are also doing more business in euro than ever before. Ikea's store in east Belfast initially refused to take euro for payment; now more than 20 per cent of its overall customer base originates in the south of the island.

The British supermarket group Asda, which has a number of stores in Border areas, has made no secret of how big an impact the value of the euro has had on its weekly sales figures. Its stores in Strabane and Enniskillen have seen euro sales soar in the last 12 months. This time last year euro transactions accounted for nearly 28 per cent of its weekly sales - today it is closer to 40 per cent.

According to Philip McDonagh, chief economist with PricewaterhouseCoopers in the North, there is plenty of anecdotal evidence that southern shoppers are helping to offset the slowdown in spending by Northern Ireland consumers.

The euro factor may keep the tills ringing in the short term but the real test for thousands of retail-dependent jobs in the North is yet to come.