Canadians buoyed by spending power flood U.S. stores

U.S. retailers reported Canadians boosted business on the weekend as cross-border bargain shoppers tested their buying power with the loonie just under par.

"They are keeping us in business, basically," said Judy Schaefer, the manager of a discount shoe store in Niagara Falls, N.Y. "And thanks to them. Right now our Canadian-based customers I would say are close to 60 per cent."

Ed Healy, a spokesman for the visitors centre in Buffalo, N.Y., said traffic has always been steady between the two countries but travel across the border has increased as the loonie ascended.

"Our partners tell us that over the last several months they've seen a marked increase in Canadian licence plates and of course everyone is quite thrilled about that," he said.

"It's fantastic news, absolutely. The Toronto, GTA, is one of our primary feeder markets and an area that we pay a lot of attention to in our marketing efforts and so to have the parity achieved like that helps us and makes our job a lot easier and we're thrilled that it's happened."

The Canadian dollar reached parity with the U.S. greenback for the first time in almost 31 years on Sept. 20. Since then, it has hovered a little under parity.

Canadian consumers press for better prices at home

Karen Hultslander of Brampton, Ont., spent $1,500 on a shopping trip for shoes and clothes on the weekend. Hultslander estimated she saved several hundred dollars on the trip, even factoring in the additional duty paid at the border.

Hultslander said Canadianretailers should evaluate how they price their products.

'They don't take that long to raise the prices, so when it's the other way around why do they take this long?' —Farhida Farzadhi, consumer

"I guess you know maybe we should be looking at how it's priced," Hultslander said.

"You hear the comments from people in Buffalo who come up to Toronto to shop and they can't believe how expensive it is, either. There definitely is a price gap and with the dollar being so close at parity now, why are we spending so much more," she said.

Farhida Farzadhi of Mississauga, Ont., said she would prefer to shop in Canada but said the price differential is substantial.

"You know what? They don't take that long to raise the prices, so when it's the other way around, why do they take this long?" she said.

Prices expected to fall in the spring

Canadian retailers said the price gap is in part related to additional shipping costs and packaging costs.

Retail analyst John Williams said he expects the retailers to lower their prices eventually.

"I think it's reasonably realistic," he said.

"It will take probably until spring to sort that out. But it shouldn't be much longer than that."

U.S. spending in Canada falls

Meanwhile, new figures show U.S. spending in Canada was down during July and August.

Electronic payment processing provider Moneris Solutions said Monday that data showed U.S. credit card transactions and ATM spending fell notably as compared to the previous year. Moneris Solutions found:

• Public golf course visits fell by 14 per cent.
• Trailer park and camp site visitsdropped by 22 per cent.
• Specialty retail spending fell by 35 per cent.
• Department store sales dropped by six per cent.
• Hotel reservations fell by 13 per cent.
• Restaurant visits dropped byeight per cent.

"Clearly, fewer Americans are seeing Canada as an attractive tourist and shopping destination and the Canadian economy is seeing a negative impact as a result of the sharp decline in U.S. spending,"Brian Green, Moneris Solutions senior vice-president, said in a release.

"Through our data, we have seen a significant decline in U.S. spending in key segments and that is having a dramatic impact on some Canadian merchants."