January 4, 2010 / 9:10 PM / 8 years ago

Canadian holiday retail sales seen up modestly

TORONTO (Reuters) - Canadian retailers likely saw a modest rise in holiday sales this season after a brutal 2008, as deep discounts and splashy promotional campaigns helped them outperform most of their U.S. counterparts.

Final numbers will not be available until next month when the bulk of the Canadian retailers report quarterly results, but rough calculations and anecdotal evidence point to a rise of 1.5 percent to 2 percent for the key holiday period, retail analysts said on Monday.

In the 2008 holiday season, sales dropped 1.5 percent.

"That's steady," said John Archer, a senior consultant at J.C. Williams Group, a Toronto-based retail consulting firm. "I think they (the retailers) will be OK with that."

The Canadian gains are expected to top the 1 percent rise estimated for retailers in the United States.

Canadian retailers, unlike their U.S. counterparts, do not provide monthly sales statistics. U.S. government data is set to be released on January 14, while Statistics Canada will not release its December sales figures until Feb 19.

John Winter, of Toronto-based retail consulting firm John Winter Associates, offers a more bullish estimate of a rise of about 2 percent for Canadian sales during the period.

"Things are looking up. Consumers are feeling a little bit better and employment may have turned around," Winter said. "It was a better year compared with last year, from what I heard. But we have still got a long way to go."

A survey released earlier on Monday by Royal Bank of Canada showed Canadian consumers are entering the new year more optimistic about the economy and less worried over job security.

PLAYING CATCH-UP

Canadian retailers are hoping robust sales during the Christmas rush will offset a slow start to winter due to unusually mild weather in much of the country.

While a wintry blast in mid-December raised the hopes of many stores trying to move seasonal goods and apparel, some are not so sure that it will make up for the prolonged warm spell, which saw Toronto record a snow-free November for the first time in more than 160 years.

The unseasonal weather in Ontario and Quebec -- Canada's most heavily populated provinces -- resulted in companies such as Forzani Group and Canadian Tire Corp being left with more inventory than planned.

This inventory included items as diverse as winter boots, jackets and skis, low-cost snow shovels, and big-ticket snow blowers.

In reaction, some retailers slashed prices and launched huge promotional campaigns to woo customers to their stores. Some have already warned that the warm November will hurt their numbers.

Forzani, the country's biggest sporting goods chain, said on a conference call in December that same-store sales for the first five weeks of the fourth quarter, which represents the beginning of the holiday shopping period, were down 10.7 percent. It blamed the decline on the "unseasonably mild weather".

Michael Lambert, Forzani's chief financial officer, would not comment on holiday sales on Monday, noting that the company was set to provide a detailed report for the period on January 14.

Canadian Tire and Walmart Canada were not available for comment.

($1=$1.04 Canadian)

Reporting by Scott Anderson; editing by Peter Galloway

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