RETAILERS LARGE and small are increasingly following the example of individual consumers by sourcing their supplies in Northern Ireland and the rest of the UK.
As shoppers from the Republic once again clogged all roads to the North over the weekend, food industry sources say the practice of "cross-stocking" from suppliers in the UK is growing in popularity due to the cheaper prices available outside the Republic.
Big chains such as Tesco and Dunnes Stores are benefiting from the weakness of sterling by importing supplies directly from the UK rather than through Irish distribution channels.
The practice is causing growing unease in the sector, but suppliers are reluctant to speak out because they are so dependent on the big retailers.
One said a number of retailers are "completely bypassing" the Irish operations of major suppliers by importing directly from their UK operations. "They can get product more cheaply there, so who can blame them? The question is are they passing the benefits on to the consumer?"
However, the retailers are still relying on Irish suppliers for merchandising and promotions, leading one supplier to claim that they were seeking to "have their cake and eat it".
There also concerns about possible job losses among Irish suppliers if the practice grows in popularity among retailers.
Meanwhile, smaller retailers and the hospitality trade are bulk buying drink and other items in the North to avail of lower prices.
Tesco's new distribution hub in Donabate, north Co Dublin, has made it easier for the company to centralise product ordering and make savings.
A spokesman for Tesco Ireland said it currently sourced a wide range of international brand products from multinational distributors. A cost premium was commonly applied to purchases through these channels, with transactions typically denominated in euro.
"Following developments in our own supply chain capabilities, we now have the option of buying these same products through the Tesco global buying process at reduced cost. These cost savings would, in time, enable us to offer lower prices on these products for customers."
He said the company has discussed this alternative approach with 20 of the largest distributors.
The spokesman acknowledged the new arrangement could have job implications "in time" but would also result in lower prices for customers.
AA Roadwatch reported long tailbacks on roads into Newry and other Northern Border towns at the weekend as shoppers from the Republic availed of cheaper prices on many items.
The normal journey time from Dublin to Newry doubled on Saturday to over three hours and the car parks of the main shopping centres in the town were filled to capacity.
Some political and business leaders have called on shoppers in the Republic to show "patriotism" and shop locally. Others have warned of significant job losses in the retail trade after Christmas due to the financial crisis and cross-Border shopping.
