Armagh And Newry Analysis

11 December 2009

In common with other towns and cities across Northern Ireland, 2009 has been a challenging year economically for the cities of Newry and Armagh, however, it is expected that a dramatic increase in the number of shoppers travelling across the border will trigger a significant spike in pre-Christmas sales figures for both cities.

Analysts estimate that cross-border shopping will cost the Irish Exchequer in the region of 430 million Euros (£388 million) this year in lost tax revenues. According to recent media reports, almost 16% of households in the Republic of Ireland are now travelling north for their grocery shopping, which equates to 250,000 households. Statistics also suggest that Northern Irish stores have captured 2.6% of the Republic’s grocery trade worth an estimated 900 million Euros (£810 million) and as much as 10% of off-sales trade worth
260 million Euros (£234 million).

Newry’s two main shopping centres, The Quays and Buttercrane, are the greatest beneficiaries of what some commentators have labelled, a “shopping bonanza”, with an estimated increase in footfall of 25%. It is understood that the Sainsbury’s store at The Quays is one of the company’s top three performing stores in the UK and it expects to record double digit growth this year over 2008 sales figures. Naturally, the huge influx of cross-border shoppers has caused some difficulties for both centres, principally in terms of traffic congestion leading to The Quays introducing parking charges for the first time earlier this year in an effort to address the issue.

Unfortunately, Newry’s local small independent retail sector has yet to benefit in any meaningful way from the tide of cross-border shoppers surging into The Quays and The Buttercrane Shopping Centres, who rarely venture across the bridge and into the city centre much to the disappointment and frustration of local retailers. Rents remain static and the city centre has a number of vacancies. On a more positive note, local hotels, bar and restaurants are experiencing an upturn in trade as a growing portion of cross border shoppers combine a shopping trip with a “stop over” or weekend break.

In contrast to previous Christmas periods, when cross-border shopping trips were confined mainly to the border towns and cities, we are now seeing a deeper penetration into the province as more and more shoppers visit cities such as Armagh. Exciting new development proposals aimed at capitalising on the city’s rich cultural and ecclesiastical history have been unveiled under the Armagh City Centre Draft Masterplan, and if implemented, will produce significant economic and financial dividends for the local businesses and retailers. Work is also progressing well on one of three Strategic Route Improvement Schemes planned for Armagh and its surrounding area, the Armagh North and West Link road scheme, which when completed, will enhance Armagh’s position considerably within Northern Ireland’s strategic road network.

The city has also benefited considerably from the volume of local and international conference business that the Armagh City Hotel, which boasts the largest conference facilities in Ireland, has attracted since it opened in 2002.

There is no doubt that Newry and Armagh are making strenuous efforts to attract inward investment and maximise their commercial potential and it is important for the business community to realise that both cities offer genuine opportunities for growth and are strategically located in terms of servicing an all-Ireland economy. Although the focus appears to be on retail development, continued inward investment and commercial activity within both cities will benefit other sections of the property market including the local office and retail and industrial warehouse distribution markets.

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