U.S. bargain-seekers hunt closer to home than Canada
By Scott Anderson
TORONTO (Reuters) - There's unlikely to be a rush of bargain-hunting U.S. shoppers flooding into Canada to take advantage of a rapidly weakening Canadian dollar because tough times at home will keep them away.
While the low-cost loonie, the Canadian currency's nickname, has been a big draw for American shoppers in the past, things are different now due to the U.S. housing crisis and general economic malaise. It hardly matters that the value of the Canadian dollar has slipped more than 20 percent this year, and that it was around 79 U.S. cents on Friday -- its weakest point against the U.S. dollar since September 2004.
"Americans are going through a tough time right now and so even while they may be hunting for bargains, they probably will tend to hunt closer to home," said Peter Woolford, vice-president of policy development and research at the Retail Council of Canada.
"The decline of the (Canadian) dollar may attract a few more people across the border. You may see them in border towns shopping tactically for items that are cheaper in Canada, but generally our members are not expecting a huge upsurge."
When the currency was at par with the greenback or even higher in late 2007 and earlier this year, Canadian shoppers were the ones border-hopping, causing hour-long waits most weekends at border crossings. But the tide of shoppers is not expected to turn again.
Recession fears and still-high transportation costs will see Americans sticking close to home, said Hart Hodges, an economics professor at Western Washington University in Bellingham, Washington, who tracks cross-border shopping figures in the U.S. Pacific Northwest.
"I don't think you're going to see a lot of that, just because of people not wanting to drive as far," he said.
"We're celebrating that gas is back below $3 a gallon, but the mindset is that gas is still expensive. And whether or not we are technically in a recession, the mood is certainly that." Continued...