Nov 27, 2009
Canadians invade the US for holiday bargains
Nov 27, 2009
BUFFALO, New York, Nov 27 (Reuters) - Big discounts and a weaker U.S. dollar lured Canadians across the border to join domestic shoppers fishing for Black Friday bargains.
Canada's holiday shopping season has no definitive starting point like the U.S. tradition of heading out the day after its Thanksgiving celebration. Often the big day for shopping bargains is Boxing Day, the day after Christmas.
But with discounts of nearly 50 percent beckoning from across Niagara Falls, Canadian consumers passed up price cuts offered by their country's top retailers in pursuit of even bigger bargains two hours away.
At the car park for the Fashion Outlets mall near Buffalo, Ontario license plates were more numerous than those from New York state, including several tourist buses and one stretch limousine.
"The pricing is a lot better here than in Toronto," said Domenic Luciano, a mortgage broker who shops in America about once a month. "The markup is a lot higher in Canada than in the U.S. I feel gouged in Toronto."
Luciano said he was buying mostly clothes for himself such as jeans and suits.
Shoppers had lined up before doors opened up at midnight. But even at midday, queues to get into the Coach (COH.N) store were averaging a half an hour wait. In a number of the stores, including Juicy Couture, security guards regulated the flow of shoppers.
The Canadian currency was at C$1.061 to the U.S. dollar, or 94 U.S. cents, on Friday 27 November, compared with a year earlier when the exchange rate was hovering around C$1.23. But the outflow of shoppers comes at a price to Canada's economy, which is emerging from more than a year-long downturn.
Michael Gregory, a senior economist at BMO Capital Markets, in Toronto, expects the cross-border trend to continue ahead of Christmas, given the greater buying power of the Canadian dollar and the attractive deals.
"When you get a little bit closer to parity I think it really ramps up, but there is also the attraction of the sales themselves. While the currency alone may not get you over the edge, the reports of very heavy discounting by U.S. retailers suggests that there will be a little more activity," he said.
Big retail chains in Canada have tried to divert the flow with discounts of their own.
Canadian Tire Corp (CTC.TO), the country's biggest auto parts and household goods retailer, offered price cuts of up to 70 percent on products from exercise gear to cookware.
Walmart Canada (WMT.N) dropped prices on thousands of items like big ticket high-definition TVs and Xbox game consoles.
"Canadian retailers understand that they are serving customers without borders. They are in the business of giving consumers what they want at the prices they expect," said Mark Beazley, a spokesman for the Retail Council of Canada.
But the local discounts were still not enough to prevent Black Friday road trips.
"I would rather put my money into the Canadian economy, but you also have to save money and make your dollar go further," said Maureen Rego, of Ajax, Ontario. "I haven't seen the great deals that we have got down here," in New York, she said.
Rego purchased clothing for her kids at Children's Place (PLCE.O), including shirts sold at 75 cents (U.S.) each. ($1=$1.06 Canadian) (Editing by Michele Gershberg; Editing by Tim Dobbyn) (([email protected]; +1 416 941 8106; Reuters Messaging: [email protected]))
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