‘Currency tourists’ take advantage of sterling slump in Border towns

Retired national school teacher Mary O’Regan is acutely conscious of sterling’s nosedive in the currency markets. From her home in Fahan, Co Donegal, she checks daily how the pound is faring against the euro via an app on her phone.

“When I see the likes of this coming, I know I’m going to get good value with the sterling,” she says in the car park of Sainsbury’s supermarket in Derry, an 18-minute cross-Border drive from where she lives overlooking Lough Swilly.

The “likes of this” is, of course, the economic chaos unleashed last week with British chancellor Kwasi Kwarteng’s mini-budget. Its unfunded tax cuts spooked international financial markets and forced sterling to a record low.

Immediately after his announcement, sterling fell 2 per cent against the euro and has been trading below the 90 pence mark since. For those living near the Border, hardwired to act on fluctuations, this usually means traffic northwards.

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“I’m very focused on what is going on over the water,” says O’Regan. “It is the best [exchange] rate we have had in a long number of years.”

‘Pound has plummeted’

While she still gets weekly staples from her local supermarket in Co Donegal, she calculates the value in Derry as she roams the aisles of Sainsbury’s and M&S … I compare it to what I’d be paying in the South. I like to pick up some nice cakes, breads and I find the fruit and vegetables are good. That is important to me. I never use my southern bank card across the Border though. It would cost me an arm and a leg. You get a very bad rate, even though the pound has plummeted. I transfer money I have into a northern account. If I want to change €1,000 to sterling today, I’ll get £890. I do that within seconds on my phone at home.”

While she eyes the food, her husband is patrolling nearby British discount retailers B&M and Home Bargains. These are where “the big savings” are to be made, they reckon. Outsized boxes of dishwasher tablets, cut-price “good brand detergents” and other general cleaning products entice them into the city.

“It is all cheaper,” says O’Regan.

This week, Home Bargains, for example, was selling 100 Finish Powerball dishwasher tablets for £8.99 — converting at about €10, compared to €15 in Tesco Ireland. A large box of Daz washing powder, promising 75 washes, was also selling for £8.99, again a €5 saving on the Tesco retail price or one-third cheaper.

A two-litre bottle of Domestos bleach was £1.99 (€2.25) compared to €2.75 in SuperValu. A large bottle of Fairy Platinum washing-up liquid costing €3.35 in Supervalu in the Republic was £2.39 (€2.70) in the North.

O’Regan’s hatchback is far from the only Republic-registered car in the car parks of Derry. Many are cross-Border workers like Anna Doherty, chief executive of Derry’s chamber of commerce, who lives outside Clonmany, in Co Donegal’s Inishowen peninsula.

Businesses in the city, she says, are hoping a surge in currency tourists — people who decide where to go based on the exchange rate — will buffer to some extent the “perfect storm” that has hit local traders in this inflationary era.

“It is probably a little bit too early to say exactly what trends are likely, but we are expecting an increase in cross-Border shoppers looking for value, especially if the euro stays around the 90 pence mark,” says Doherty.

“It’s been a perfect storm for businesses in Derry, of energy and fuel cost rises, the highest business rates in the UK, labour shortages, dropping consumer confidence as well as high inflation.”

Like many others, Doherty is canny about picking up deals in the North.

“Washing-up liquid, cleaning products, toilet roll, those sort of things,” she says. “But I can justify it in that I’m going there anyway for work. Also, there are more bargains now in the south, with the arrival of discount stores, there is more choice.”

Even with the proliferation of no-frills discounters on both sides of the Border, there remain differences in grocery shopping bills when comparing like for like. On Thursday, The Irish Times conducted an almost identical shop of mainly generic brands in Lidl in Derry and Lidl in Tullamore, Co Offaly.

A trolley of 29 everyday items — including bread, milk, butter, tea, cereal, meat, fish, fruit and vegetables as well as basic cleaning products — totalled €42.21 at the Tullamore checkout. In Derry, based on the exchange rate of the day, it came in at €38.33 — an almost 10 per cent saving.

There were some notable differences on the receipts. A large sliced pan of bread was more than double the price in the South at 90 cent, compared to the North’s 40 cent. A four-pack of chicken breasts was about 50 per cent higher in Tullamore.

But other staples like butter, biscuits and washing powder were more expensive in Derry.

Comparing prices between supermarkets is not an exact science, considering special offers on any given day or people’s personal preferences. Comparing them across currencies against a backdrop of zig-zagging exchange rates is even more fraught.

It is not a pursuit that ever attracted mother-of-three Brigid Farren, who ran a shop in Buncrana, Co Donegal.

“By the time you drive in, pay for your parking, and you might stop for a cup of tea and a bun, I just never got it,” she says, after coming out of Sainsbury’s, where she was looking for a lipstick that she cannot buy near home.

“Even when my kids were younger, I never saw the big savings. But then maybe that’s just me. Most people I know in Donegal keep a sterling purse as well, but I don’t have one. I have noticed a lot of business people who cross the Border to do their shopping. They say it is much less expensive,” she adds.

Less to spend

In Tullamore, pensioner Annie Byrne was doing her “big” shop in Lidl’s branch at Church Road in the town on Thursday. She remembers travelling on shopping trips to the North during the 1970s with her late husband.

“We used to go to Newry every now and then,” she says. “It was an outing but we would also buy lots of canned goods — you could get tins with steak and kidney pie and stew and stuff like that, stuff you wouldn’t buy every week. It was nice to have them in the cupboard. I would not be bothered making that trip now.”

For those closer to the Border, the incentives are different, and time will tell whether people start changing where they shop.

“People have less in their pocket, but that is the case in the Republic too, so it may not be the same numbers coming across as happened in previous recessions. The circumstances are so extreme this time,” says Doherty.