Tesco Ireland is to introduce euro-sterling price parity on all its clothes from Monday as part of a €20 million price re-structuring.
Customers will be able to pay whatever the sterling price is on the tag in euro and based on today's exchange rates, shoppers in the Republic will consequently pay 7 per cent less than their counterparts in Northern Ireland for the same products.
Tesco has been one of the stores which has drawn considerable flack from consumer groups and politicians in recent months for failing to pass on the savings as a result of weakening sterling. Critics have identified clothes selling in Tesco’s outlets in the Republic at well over 30 per cent more than in the North.
The store’s commercial director, Jacqueline O'Neill said customers "need not travel to Northern Ireland as they will now benefit at home from this long term initiative by Tesco".
While the move has been broadly welcomed, it is unlikely to lead to the North's shoppers flocking to Tesco outlets south of the border in search of bargains as clothes amount to just five per cent of the store's retail sales - although a spokesman for Tesco told The Irish Timesthat clothes sales in the Republic were "growing significantly".
When asked if the store was planning to introduce price parity across its substantially larger grocery range, the spokesman said that was a more complex situation but claimed that the store was "working to reduce the gap there too".
Chief executive of the Consumer Association of Ireland Dermott Jewell predicted the pricing announcement would generate significant levels of goodwill for the retailer.
"Let's be honest, it is a positive move and one which I think will be of benefit to Tesco as it will almost certainly be remembered as the first store to act," he said. "It is putting it up to the other retailers and they have a choice of putting their houses in order or be left behind. They have to react or find themselves being left behind.”
No one from Dunnes Stores, the other major clothes and grocery retailer operating north and south of the Border, was available for comment today.
