‘ CAUTIOUSLY OPTIMISTIC’
... despite holiday sales forecast
Mounting layoffs in Alberta’s oilpatch and the faltering provincial economy are expected to cut into the holiday shopping season.
A report Tuesday from EY ( Ernst & Young) said the troubled resources industry “will drag results in Alberta and Saskatchewan to a slight year- over- year drop in sales.”
Paige O’Neill, general manager of Cadillac Fairview’s Chinook Centre, said holiday shopping typically starts after Remembrance Day and really kicks off with Black Friday, following the American Thanksgiving holiday, on Nov. 27.
“We have seen the trend in sales anywhere from two to seven per cent ( year- over- year increases on a monthly basis) since the spring. However, given sort of the state of the economy across Canada and Alberta and Calgary — and the more recent announcements of more layoffs — we want to be cautious about our expectations for sales,” she said.
“And while we think we’ll still be even and up ( from last year), we’re definitely cautiously optimistic.”
O’Neill said the lower Canadian dollar could also influence people to shop within the province.
Mike Kehoe, a retail specialist with Fairfield Commercial Real Estate in Calgary, said retailers and shopping centre managers in the Calgary region are optimistic for “the proverbial pot of gold.”
“Retail sales levels are expected to be softer than 2014 due to the current economic conditions but most agree that if sales levels are comparable to the fourth quarter of last year it will be seen as a good year for retail in the Calgary market.”
On a national level, the EY report said retail holiday sales are expected to grow by four per cent over last year and EY’s report says millennials will drive the spending.
Daniel Baer, EY partner and national retail and consumer products industry leader, said the holiday period in Alberta will be a continuation of a trend throughout this year. For the first eight months of 2015, retail sales in Alberta were down 2.9 per cent from a year ago.
“Part of it is based on the resource sector and how the resource sector is doing. Economic factors and consumer confidence are important when it comes to retail sales. Whenever there is uncertainty around employment, whenever there’s uncertainty around bonuses ... that’s an issue,” said Baer.
“Keep it in context that Alberta has traditionally been one of the strongest markets because it had the lowest levels of unemployment and certainly the highest levels of population growth with immigration from other provinces.”
Baer said Alberta led the country during the period of 2011 to 2014 in annual retail sales growth with about six to seven per cent hikes.
The EY report said other factors are contributing to consumers’ joyful spirit in other parts of the country — gas prices are down about 19 per cent year over year, new federal child tax payments are more generous, and employment growth and consumer confidence remain healthy.