Canadian stores take Black Friday hit
Seasonal drain to U.S. expected to reach $5 billion
TORONTO — Two hundred shoppers lined up to snag a free $10 gift card as Toronto’s Eaton Centre opened at 6 a.m. on Friday, and some said they waited for two hours — a scene that played out in centres across the country as shoppers took part in the first Canadian version of the U.S. “Black Friday.”
While the early-bird crowd would have been a disappointment at any major shopping centre in the U.S., where Black Friday — the day after U.S. Thanksgiving and traditionally the beginning of the holiday shopping season — was in full swing, it was new for Canada, which celebrates Thanksgiving in October and usually sees its best sales after Christmas.
Shoppers said they wanted to be part of Canada’s first Black Friday. Indeed, the sales went mainstream last year, when nearly all major retailers ran some kind of promotion.
Nevertheless, while retailers such as Hudson’s Bay Co. were advertising Black Friday deals of their own, higher duty-free limits, lower U.S. prices and a currency near par with the U.S. dollar were expected to lead to at least a 25 per cent increase in lost sales abroad in November and December, said Douglas Porter, deputy chief economist at the Bank of Montreal. He said the sales drain will total $5 billion.
The federal government in June raised the amount Canadians can spend duty-free to $200 from $50 for trips longer than 24 hours and as much as $800 for stays of more than 48 hours, giving shoppers more incentive to head south. Overnight trips to the U.S. rose 58 per cent from 2001 to 2011, the latest year data is available from Statistics Canada. The loonie has surged about 56 per cent over the period, from 63 cents US at the end of 2001, and hovered near par on Friday.
“People are doing little shopping vacations in the U.S., even for a weekend,” said Porter by phone from Toronto.
According to a Harris-Decima survey of 1,004 people conducted from Oct. 18 to 21 by the Retail Council of Canada, six per cent of Canadians planned a trip to the U.S. for Black Friday deals.
When Macy’s opened its doors in New York City at midnight, 11,000 shoppers showed up. Target Corp. opened its doors at 9 p.m. Thursday, three hours earlier than last year.
According to Canada’s Retail Council, retailers with stores in both countries pay suppliers 10 per cent to 50 per cent more for a product sold in Canada.
Suppliers say they need to charge higher prices to supply a smaller, more dispersed Canadian population, which makes volume discounts more difficult, the council said in a submission to a Senate inquiry into consumer price discrepancies.
As a result, Canadians pay 13 per cent more for a 46-inch LED TV than those sold in the U.S., 47 per cent more for a printer, and 31 per cent more for a coffee maker, a survey by the Retail Council said.