Retailers will have to pass on Euro benefits to consumers: Tanáiste

R

rmelly

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Great - problem solved. Good to see that the government has moved on from Mary Harney's solution of shopping around.
 
Part of the problem relates to the way in which the UK based retailers work.

Say they are buying wine from a Euro country. When selling in the UK they factor in a Sterling-Euro exchange risk into the selling price. If they now go on to sell in Ireland they add on another Euro-Sterling exchange risk! This when there is no exchange risk at all!

I have posted here before about this but I dont know how the practice can be stamped out.

I was hoping the the German Discounters would buy in euros and sell in euros and thus gain a competitive advantage over the UK based retailers. But Im unsure as to how they price for exchange rate risk.
 
If it is purely the inclusion of exchange rate risk, the relationship between sterling and euro prices would be consistent across the product ranges. I recall that great variations between exchange rates were identified for products in the same stores. I will have to have a look at this in the coming weeks.

I think that logic is trying to be applied to retailers deciding that people here will pay more for the same product or service than our counterparts in the UK. recalling my college days now...price elasticity of demand...
 

Not true: to get no risk, the retailer would have to figure out how much they were going to sell of it priced in Euro and avoid the double conversion (i.e. when they buy and when they sell). As it is (assuming they're trading in sterling) they do have to do two conversions (though even this is a simplistic way of looking at it).

Anyway, it's all academic: the bottom line is that they will price items with what they think the market will pay. We're willing to pay it, so they're happy to price accordingly.

This is especially true of non-basic items: people on low incomes can only afford the basics, and can and do shop around for them, hence you get price competition on basic things (bread, milk etc.). Anything that's in the least discretionary and competition goes out the window, as we seem happy to pay whatever's asked.
 
ang1170 said:
Not true: to get no risk, the retailer would have to figure out how much they were going to sell of it priced in Euro and avoid the double conversion
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Not really. If the retailer buys in Euro and sells in Euro then there is zero exchange rate risk. This is one of the advantages of the Euro.

Put another way; why should Irish consumers pay for the sterling exchange risk for UK retailers?
 
rmelly said:
[broken link removed]
Great - problem solved. Good to see that the government has moved on from Mary Harney's solution of shopping around.
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There's no indication of what they're actually going to do, though. Apart from "monitoring" and "maintaining pressure", whatever that means.
 
rmelly said:
[broken link removed]
Great - problem solved. Good to see that the government has moved on from Mary Harney's solution of shopping around.
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GIven that there is no legislation which covers this area (and it is extremely unlikely that the current Govt will bring in such legislation), don't hold your breath waiting for a result.
 
A number of shops are now covering the sterling price on the price tags so we won't know the difference. Coast being one in Limerick today.
 
I noticed quite a few price cuts (not special offers) in Tesco over the weekend. For example, some items that were €2.99 are now €2.75.
 
Megan said:
A number of shops are now covering the sterling price on the price tags so we won't know the difference. Coast being one in Limerick today.
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I would recommend trying the garment on in store and then ordering it online. Coast UK charge a flat fee of £7.95 for any package to Ireland.

I wanted to a buy a dress from Reiss, they were charging €215 in store, online it was £145 (€181.00). Even with the delivery charge I would still save about €30.00.

I told the store assistant that I would be buying online instead.
 
Personally I now browse the high street shops for the items i like, go home and buy them via the internet. The only fools here are us, if we all stop doing business with retailers and service providers that are ripping us off they will be forced to revise their pricing policy.

Incidentally I was looking at the price of You & Your Money and their Sterling / Euro price was appalling. Shame on you Eddie, you have been added to my list.
 
theoneill said:
Incidentally I was looking at the price of You & Your Money and their Sterling / Euro price was appalling.
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Even allowing for the VAT differences? Isn't it 0% in the UK and 21% here? Not sure what scope there is for dynamically varying the price of magazines based on currency fluctuations given the lead time to produce and print them etc. anyway?
 
theoneill said:
Incidentally I was looking at the price of You & Your Money and their Sterling / Euro price was appalling. Shame on you Eddie, you have been added to my list.
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Did you take into account the fact that magazines are subject to 21% VAT here and zero VAT in the UK? Hardly Eddie's fault...
 
if anybody is that price sensitive then they could always ask their local library to buy the mag and read it there.
 
ubiquitous said:
Did you take into account the fact that magazines are subject to 21% VAT here and zero VAT in the UK? Hardly Eddie's fault...
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Point taken
*removes Eddie from list and adds government

ClubMan said:
if anybody is that price sensitive then they could always ask their local library to buy the mag and read it there.
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You may have a point, But I think as a nation we are not sensitive enough to prices.

Also I wonder can anyone answer a question I bought paracetamol in a pharmacy in France for 17cent, the cheapest I got it here was for e1.50?
Even in Tesco just off Oxford St. it was 20p.

Are medicines in the rest of Europe subsidised?
 
theoneill said:
You may have a point, But I think as a nation we are not sensitive enough to prices.
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Yes - a lot of people prefer moaning to action.
Are medicines in the rest of Europe subsidised?
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Over the counter medicines? Don't think so as a rule. Were they exactly the same brand, potency etc.?
 
I think they were more generic, but still I found the price difference staggering.
But they were the exact same strength as any you would buy here.
 
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