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Impact of Cross-Border Shopping - Ireland - August 2009

The cross-border shopping trend has had a tremendous effect on retailers in both NI and RoI. This report looks at the motivations behind RoI consumers shopping in NI, what items they buy and the overall impact it has had on both regions.

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Table of contents

  1. Issues in the Market

      • Key themes of the report
        • Definition
            • Figure 1: County of origin for cross-border shoppers, RoI, 2009
          • Abbreviations
          • Insights and Opportunities

            • NI non-food retailers could reap the benefits of RoI grocery price increase
              • Guilt over local jobs and industry could boost RoI retailer sales
                • Tourism will play a more prominent role
                • Market in Brief

                    • Low prices are driving the cross-border shopping trend
                      • CB shoppers visiting at least once per month
                        • The CBS trend is on shaky foundations
                        • Fast Forward Trends

                            • Trend 1: Transparency
                              • What's it about?
                                • What we’ve seen
                                  • What next?
                                    • Trend 2: Be Spontaneous
                                      • What's it about?
                                        • What we’ve seen
                                          • What next?
                                          • Internal Market Environment

                                            • Key points
                                              • Massive loss of assets spurs on cross-border shopping (CBS)
                                                • Figure 2: Average value of household assets, RoI, 2006 and 2009
                                              • Losses spur RoI consumers into action
                                                • Financial pressures outweigh unpatriotic claims
                                                  • Less guilty, more angry
                                                    • Figure 3: Percentage difference in RoI prices compared to EU average, 2009
                                                  • NI long-term plans to poach RoI shoppers
                                                    • Retailers moving closer to the source…
                                                      • …but not quite jumping over the border just yet
                                                        • NITB championing NI to RoI consumers
                                                          • The power of promotion
                                                            • NI visitors to RoI drop
                                                              • Figure 4: Cross-border visits, NI and RoI, 2003-08
                                                            • Those who drive to cross-border shop will spend more and stay longer
                                                                • Figure 5: RoI car ownership, 1996-2020*
                                                              • Trains provide vital routes for CB shoppers
                                                                • CB diners lessen the impact of the recession for NI restaurants
                                                                  • Getting the price right
                                                                    • CB shoppers are not travelling via NI airports
                                                                      • Figure 6: Decrease in passenger numbers at NI airports, April 2008-09
                                                                    • Sporting events attract CB shoppers to towns and cities in NI
                                                                      • Is CBS driving a wedge between RoI and NI prosperity?
                                                                        • Breakdown in cross-border initiatives
                                                                        • Broader Market Environment

                                                                          • Key points
                                                                            • Gloomy RoI economy will only drive cross-border sales
                                                                              • Figure 7: Economic outlook, NI and RoI, 2008-10
                                                                            • NI and RoI consumer confidence showing signs of recovery
                                                                              • Figure 8: Consumer Sentiment/Confidence Index for 12 months ended June 2009
                                                                            • Sterling struggles to find its strength
                                                                              • Figure 9: Pound to euro exchange rate, 2003-09*
                                                                            • Unemployment set to increase for both NI and RoI
                                                                              • Figure 10: Unemployment rates (% of workforce unemployed), by country, 2006-09
                                                                              • Figure 11: Number of redundancies, by month, RoI, 2008 and 2009
                                                                            • Could smaller households see fewer consumers cross-border shop?
                                                                              • Figure 12: Average size of households, NI and RoI, 1971-2007
                                                                          • Strengths and Weaknesses

                                                                            • Strengths
                                                                              • Weaknesses
                                                                              • Growth of Cross-Border Shopping and the Impact on RoI

                                                                                • Key points
                                                                                  • Cross-border spending up in 2009
                                                                                    • Figure 13: Estimates and forecast of value of cross-border shopping, 2007-09*
                                                                                    • Figure 14: Estimated total cost of cross-border shopping to RoI economy, 2007-09
                                                                                  • Influx of RoI visitors
                                                                                    • Figure 15: Cross-border visits from RoI consumers, Q1 2008 AND Q1 2009
                                                                                    • Figure 16: Cross-border visits from RoI consumers, 2007-09*
                                                                                  • The Newry effect
                                                                                    • The Belfast bonanza
                                                                                      • Figure 17: Percentage of day trips to Belfast represented by RoI consumers, 2007 and 2008
                                                                                    • Four in five visiting Christmas shoppers are CB shoppers
                                                                                      • RoI economy suffers wipe out
                                                                                        • RoI exports to NI drop by a quarter
                                                                                          • Figure 18: Exports from RoI, by country, Q1 2008 AND Q1 2009 (€m)
                                                                                      • Competitive Context

                                                                                        • Key points
                                                                                          • RoI companies dropping prices at fastest rate in Europe
                                                                                            • RoI Government urging consumers to spend rather than save
                                                                                              • Attempting to stem the flow North
                                                                                                • Online CBS not reaching its potential
                                                                                                  • Figure 19: Consumers who have used the internet in the last 12 months, by age, NI and RoI, 2008
                                                                                                • eBay presents an opportunity for NI traders
                                                                                                  • Figure 20: Percentage increase on sales of items on ebay.ie, 2008-09
                                                                                              • Who’s Innovating?

                                                                                                • Key points
                                                                                                  • Dunnes gets brownie points for being Irish
                                                                                                    • CB shoppers Working together – rather than against each other
                                                                                                      • Alliances with suppliers work for larger retailers
                                                                                                      • Frequency of Cross-Border Shopping

                                                                                                        • Key points
                                                                                                          • 44% of CB shoppers visit NI at least once a month
                                                                                                            • Figure 21: How often consumers cross the NI/RoI border to shop, RoI, June 2009
                                                                                                          • Older consumers less inclined to CBS
                                                                                                            • Figure 22: How often over-50s cross the NI/RoI border to shop, RoI, June 2009
                                                                                                          • One hour travel is enough
                                                                                                            • Figure 23: Length of time consumers are willing to travel to cross-border shop in order to save a quarter on their grocery bill, RoI, June 2009
                                                                                                          • Weekend the most popular time to cross-border shop
                                                                                                            • Staying overnight may get consumers to travel longer distances
                                                                                                              • Most cross-border shoppers have children
                                                                                                                • Figure 24: How often consumers cross the NI/RoI border to shop, by number of children, RoI, June 2009
                                                                                                            • Cross-Border Shopping Preferences

                                                                                                              • Key points
                                                                                                                  • Figure 25: Items bought by consumers when cross-border shopping, RoI, June 2009
                                                                                                                • General groceries most in demand
                                                                                                                  • NI brands not benefiting greatly from CBS trend
                                                                                                                    • Figure 26: Attitudes and usage of beer, hot drinks and yogurt brands, IoI, June 2008
                                                                                                                  • Alcohol flying over the border
                                                                                                                    • Cross-border bingeing
                                                                                                                      • Figure 27: CB shoppers who bought alcohol when cross-border shopping, by gender and age, RoI, June 2009
                                                                                                                      • Figure 28: Alcohol price difference between RoI and NI, June 2009
                                                                                                                    • A third buy fresh products
                                                                                                                      • Figure 29: CB shoppers who bought fresh produce, fresh dairy product or fresh meat when cross-border shopping, by socio-economic group, RoI, June 2009
                                                                                                                    • Women make clothing budget go further
                                                                                                                      • Figure 30: CB shoppers who bought clothes when cross-border shopping, by gender, RoI, June 2009
                                                                                                                    • Rock-bottom clothing winning out over ethical-minded clothing
                                                                                                                      • Looking good during the recession
                                                                                                                        • CB shoppers only buy electronic goods that they can carry
                                                                                                                          • Figure 31: CB shoppers who buy electronic goods, DIY homeware, furniture or white goods when cross-border shopping, RoI, June 2009
                                                                                                                        • Cycle of obsolescence
                                                                                                                          • Asda the biggest draw for RoI consumers
                                                                                                                              • Figure 32: CB shoppers who visited selected retailers when cross-border shopping, RoI, June 2009
                                                                                                                            • Supermarkets key destination for main CBS items
                                                                                                                              • Figure 33: CB shoppers who visited supermarkets for selected items, RoI, June 2009
                                                                                                                            • Tesco NI lacks the novelty factor
                                                                                                                              • Do CB shoppers avoid visits to non-food retailers?
                                                                                                                                • Figure 34: CB shoppers who visited Asda for non-food items vs. non-food specialists, RoI, June 2009
                                                                                                                              • High density of branded retailers equals more CB shoppers
                                                                                                                              • Consumer Motivations for Cross-Border Shopping

                                                                                                                                • Key points
                                                                                                                                    • Figure 35: Reasons for CBS other than shopping, RoI, June 2009
                                                                                                                                  • It’s all about the money
                                                                                                                                    • Variety is the spice of live
                                                                                                                                      • 35-49-year-olds are the key bargain hunters
                                                                                                                                        • Figure 36: Consumers motivated to cross-border shop for better bargains, by age, RoI, June 2009
                                                                                                                                      • Single-minded shoppers
                                                                                                                                          • Figure 37: Activities undertaken by CB shoppers other than shopping, RoI, June 2009
                                                                                                                                        • A shift in retail prices will drive away the price-focused
                                                                                                                                          • Eating the main activity after shopping
                                                                                                                                            • Catching up with friends and family
                                                                                                                                              • Shoppers will continue to come, even if the Pound gets stronger
                                                                                                                                                  • Figure 38: Response to the statement ‘If the exchange rate changes again, making Sterling less affordable, will you continue to go up north to shop?’, RoI, June 2009
                                                                                                                                                • Not just savings that draw shoppers to NI
                                                                                                                                                • Reasons Not to Shop

                                                                                                                                                  • Key points
                                                                                                                                                    • Figure 39: Reasons why main shoppers rarely or never cross-border shop, RoI, June 2009
                                                                                                                                                  • Can’t be bothered
                                                                                                                                                    • Figure 40: Main shoppers who rarely or never cross-border shop because it is too much hassle, by gender and age, RoI, June 2009
                                                                                                                                                  • A quarter are loyal to their local retailer
                                                                                                                                                    • Figure 41: Main shoppers who rarely or never cross-border shop because they prefer their own retailer/local shop, by age, RoI, June 2009
                                                                                                                                                  • Guilty or not guilty?
                                                                                                                                                    • Figure 42: Main shoppers who rarely or never cross-border shop because they feel guilty and should support their local businesses, by socio-economic group, RoI, June 2009
                                                                                                                                                  • The new fun and friendly NI
                                                                                                                                                  • Appendix

                                                                                                                                                    • Consumer research information
                                                                                                                                                      • Internal market environment tables
                                                                                                                                                        • Figure 43: Bus passenger journeys and train passenger journeys, NI and RoI, 2004-08
                                                                                                                                                      • Broader market environment tables
                                                                                                                                                        • Figure 44: NI and RoI population, by gender, 2006-20
                                                                                                                                                        • Figure 45: NI population, by gender, 2006-20
                                                                                                                                                        • Figure 46: RoI population, by gender, 2006-20
                                                                                                                                                        • Figure 47: Forecast population change, by age, NI, 2000-20
                                                                                                                                                        • Figure 48: Forecast population change, by age, RoI, 2000-20
                                                                                                                                                        • Figure 49: Pound to euro exchange rate used, 2004-13
                                                                                                                                                      • What consumers buy when cross-border shopping tables
                                                                                                                                                        • Figure 50: Goods that CBS consumers buy, by shops visited, RoI, June 2009
                                                                                                                                                        • Figure 51: Goods that CBS consumers buy, by shops visited, RoI, June 2009
                                                                                                                                                        • Figure 52: Goods that CBS consumers buy, by shops visited, RoI, June 2009
                                                                                                                                                      • Cross-border shoppers’ demographic tables
                                                                                                                                                        • Figure 53: How often consumers cross the NI/RoI border to shop, by gender, age, socio-economic group and number of children, RoI, June 2009
                                                                                                                                                        • Figure 54: Motivations for consumers to cross-border shop, by gender, age, socio-economic group and number of children, RoI, June 2009
                                                                                                                                                        • Figure 55: Length of time consumers are willing to travel to cross-border shop, by gender, age, socio-economic group and number of children, RoI, June 2009
                                                                                                                                                        • Figure 56: Other activities undertaken when visiting NI other than shopping, by gender, age, socio-economic group and number of children, RoI, June 2009
                                                                                                                                                        • Figure 57: Response to the statement ‘If the exchange rate changes again, making Sterling less affordable, will you continue to go up north to shop?’, by gender, age, socio-economic group and number of children, RoI, June 2009
                                                                                                                                                        • Figure 58: Items bought by consumers when cross-border shopping, by gender, age, socio-economic group and number of children, RoI, 2009
                                                                                                                                                        • Figure 59: Items bought by consumers when cross-border shopping, by gender, age, socio-economic group and number of children, RoI, 2009
                                                                                                                                                        • Figure 60: Retailers visited by consumers when cross-border shopping, by gender, age, socio-economic group and number of children, RoI, 2009
                                                                                                                                                        • Figure 61: County of origin for cross-border shoppers, by gender, age, socio-economic group and number of children, RoI, 2009
                                                                                                                                                        • Figure 62: Reasons for not cross-border shopping, by gender, age, socio-economic group and number of children, RoI, 2009

                                                                                                                                                    Companies Covered

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                                                                                                                                                    Impact of Cross-Border Shopping - Ireland - August 2009

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