Currys in Ireland has said that the introduction of products priced at the UK VAT rate of 15pc resulted in the company experiencing double-digit sales in the past fortnight.
Declan Ronayne, the head of DSG in Ireland– which runs both Currys and PC World – said that consumers have had enough of the punitive 21.5pc VAT rate and have voted with their wallets.
“You don’t have to be George Lee to figure out that this has worked not only for Currys, but for the country also. We’ve absorbed the enormous VAT difference between here and the North, leading – in many cases – to double-digit percentage price reductions.
“Our customers have seen it, liked it and responded with their wallets. Bringing the VAT rate down will bring prices down, give consumers confidence to spend and put more money in the Exchequer coffers.”
Ronayne said Currys has committed to providing the Minister for Finance, Brian Lenihan TD, and Opposition finance spokespeople with a report on the effect of its initiative on cross-border trade and Exchequer VAT income in June.
In recent weeks, Ronayne angrily pointed out to the Minister for Finance that three Currys stores in Northern Ireland alone have seen sales rise by €12m because of shoppers from the Republic flocking North.
“Cross-border shopping in our stores in Northern Ireland alone costs this country €2m in VAT income. The human and financial cost to the country in both lost VAT and retail jobs is mounting monthly – estimates of at least €200m seem conservative at this point.
“Our figures will speak for themselves, and perhaps then the Minister might take the question of VAT, consumer sentiment and retail jobs more seriously, as he has been fairly dismissive so far. That lack of understanding continues to be a source of disappointment,” Ronayne said.
The Currys UK VAT range price promotion continues in-store, and will be supported by a distinctive national TV and print advertising campaign devised by Dublin agency Rothco, following a briefing from Currys, Dublin.
Visually, the advertising uses the tongue-in-cheek creative device of a Union Jack flag superimposed with the colours of the Irish flag. As such, it is solely intended as a device to instantly communicate that Ireland is taking over the 15pc UK VAT rate for the month of May at Currys.
By John Kennedy