Retailing has never been easy, and the numbers suggest it’s going to get increasingly difficult for B.C. retailers.
According to the latest Statistics Canada data, B.C. retail sales dipped 1% in June to $5.09 billion after staying relatively flat in the past 10 months. A recent Central 1 Credit Union report noted June’s drop was the largest monthly decline since last December, partially the result of lower consumer confidence and weakening housing markets in the region.
But the federal government’s increases to the duty-free spending limit for single and multi-night stays outside the country might affect sales further. StatsCan data showed that Canadians took nearly 2.8 million overnight trips in June, the highest number in a single month ever recorded. Two-thirds of them were to the U.S. and almost half (43%) were by car.
With Bellingham-area residents reportedly complaining about too many Canadians at their big-box stores, it’s a safe bet to say that some of the cross-border traffic increases have resulted from Canadians taking advantage of the new higher duty-free limits instituted by Ottawa and a persistently high loonie hovering around par with the U.S. dollar.
But aside from the anecdotal evidence, Statistics Canada also showed that Canadians have been spending record amounts overseas. Canadian travellers spent $8.5 billion outside the country in the three-month period ending June 30, a 1.5% increase over spending in 2012’s first three months. Canada’s travel spending deficit with the U.S. (the excess of Canadian travel spending over U.S. tourist spending in Canada) edged up $45 million in the period to $3.3 billion.
Retail data over the coming months will show whether June’s increases were temporary or part of a growing trend. But cross-border shopping has the potential to jump.
According to a BC Stats report in April, although the number of B.C. travellers has steadily increased in recent years to more than 12 million trips per year, it’s still well below the nearly 20 million trips in the early 1990s when the loonie was at US$0.85. A bigger duty-free limit might just be the added incentive to push even more B.C. residents south for their retail therapy. •
