Dollar adds zest to U.S. shopping
Cross-border retailing rising with the loonie, but visits far from peak due to security worries
May 31, 2007 04:30 AM
Dana Flavelle
business reporter
More Canadians are shopping in the U.S. now that the Canadian dollar has jumped to above 93 cents (U.S.), according to some mall operators in such border towns as Buffalo and Detroit.
But the exodus is nowhere near the rates seen in the early 1990s, statistics show, as concerns about U.S. border security continue to keep many Canadians at home and consumers have so much more choice here at home.
“We’re seeing a greater number of Canadian shoppers come down over the last 12 months,” said James Soos, general manager of Buffalo’s Walden Galleria mall.
Great Lakes Crossing, in Detroit, says it’s also seeing an increase, especially over Canadian holiday weekends.
Victoria Day was a “good crowd for a Monday,” said Melissa Morang, marketing and sponsorship director for Great Lakes mall. “Everybody who I approached was a Canadian.”
The dollar has been rising dramatically since hitting a low of 62.76 cents (U.S.) in 2001, giving Canadians a lot more purchasing power south of the border.
Canadian consumers also like the fact that U.S. malls offer a somewhat different selection of stores and merchandise, the mall managers said.
But cross-border shopping rates have yet to recover from the impact of the terrorist attacks of September 2001 on U.S. border security, and are stuck at levels last seen in the mid-’80s, according to federal statisticians.
“It fell off a cliff on Sept. 12, 2001, and basically hasn’t recovered,” said Philip Cross, director of economic analysis for Statistics Canada. “That link with the exchange rate is gone.”
Now, more Canadians are worried they’ll need a passport to enter the U.S. by land as early as January 2008.
“There’s a lot of perceptions out there that it’s just not worth popping across the border to fill up the tank,” Cross said.
Same-day car trips to the U.S., considered the best measure of cross-border shopping, hit a low of 20.8 million the year after terrorists attacked.
They remained low for the next two years, even while the Canadian dollar soared to 83 cents (U.S.) from 63 cents, federal data show.
Cross-border car trips have since recovered to near their pre-9/11 levels. But they are nowhere near the all-time high reached in 1991, when Canadians armed with 89-cent dollars and a hatred of the new goods and services tax made 59.1 million trips that year.
Another factor is the changing Canadian retail landscape, said retail consultant Anthony Stokan, of Anthony Russell Inc., in Toronto.
“Today is a very different world than a decade and a half ago when we were all cross-border-shopping mad even though the dollar is obviously at an extraordinary position unlike at any time in 30 odd years,” Stokan said.
Since the mid-’90s, many U.S. and European retailers have set up shop in Canada, giving consumers more selection at home.
“There really isn’t any need to cross-border shop any more,” Stokan said. “That’s how much the world has changed in less than a generation.”
