Do they know it’s Christmas

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Government must reduce excise this Christmas to stem the flow of shoppers northwards



16 November 2009

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Christmas is finally upon us and whether you’re in the doubtful camp or that of the brazenly optimistic, we’re all wishing and hoping deep down for a good one. Last year saw sales dip a lot less than they could have done – thanks to the fact that the proverbial fan had not yet been hit at that stage – but could we dare to infer that it’s possible Irish consumers could unleash the spend against all odds again this year?

Word is this will largely depend on what the Government presents us with on 9 December. Everyone, including our great leadership, is aware by now that currency, VAT and excise differentials between north and south are going to attract the masses once again into Northern Ireland; sterling is already heading back towards the weak levels of Christmas 2008. We are also all aware that consumer spending power and confidence has already taken a battering.

We have seen however, that sales decline in the retail sector has begun to level off in the last quarter, and consumer sentiment is finally on the rise once more, according to the ESRI/KCB Ireland August, September and October reports. This is surely an indication that the Irish consumer’s fragile confidence is starting to return. With the right encouragement, that confidence could bloom into something powerful in the months ahead; it is the salve so sorely needed by the retail sector.

It is understandable that many fear the pending budget may succeed in breaking down this fragile but greatly needed confidence just before the height of the festive season. And we must be realistic. Both the IMF and ECB have clearly stated their position on Ireland’s spending; this budget, and successive budgets, must be tough to restore the country’s finances.

All the more reason to do everything possible to get those with the cash and the will to spend it to do so when the opportunity arises. And to spend it here, within our economy. The Irish Times recently reported that the total cost to Ireland of cross-border shopping this year will be €810 million. That’s money that could have been spent here.

Now as Christmas approaches, we have an opportunity to drive sales and the onus is on the Government to make sure it makes no more decisions that weaken the economy further. The decision to increase VAT was a mistake, it cost us money. This year, let’s hope they learn from this and make the right decision: cut excise on alcohol right down and keep Irish shoppers in the Republic of Ireland to spend their money here. Temporary reductions or ‘tax holidays’ are what is needed now. We’ve all taken the pain this year, would the Government please try taking a dose of ‘common sense’ itself.



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