Irish shoppers are choosing to keep their money at home as a strong Euro exchange rate is leaving them with more for their currency in the Republic than in the North.
Cross-border sales have plummeted in recent months due to a combination of a stronger Euro and the raised VAT rate from David Cameron's new government.
Tesco Ireland’s chief executive, Tony Keohane, said the turn-around – from a situation where nearly everything bought in the North would be cheaper than in the Republic – was excellent news for the country's economy.
"I'm in the happy position of managing queues in-store again,” he said, thanking his supplier base for continued support during a time of great change.
He added that moves by the Republic's big grocery retailers had led to a 40-50 per cent drop in cross-Border shopping, rising to 70 per cent in certain key categories such as health and beauty products.
Trade leaders in the North, however, are fearful and have labeled it a “regressive move” which could hit everyone in Northern Ireland, from low-income families to pensioners.
One shop assistant in a hypermarket just outside Lisburn said there were other reasons behind the change too.
“Everyone’s either out marching or avoiding the marches by staying at home,” she said. “Even so, we have noticed a dramatic fall-off in the number of people coming in from the South. A year or so ago we were offering 90p for a euro, today it’s just 79p.”
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