Declining Loonie Slows Cross-border Shopping

Cross-border shopping decline | BCBusiness
The declining Canadian dollar is having a slowing effect on cross-border shopping.

A new survey from Insights West indicates the weakening Canadian dollar is slowing cross-border shopping

The declining loonie is keeping more Canadians north of the border, according to a recent survey by polling company Insights West. A sample of 810 residents of Metro Vancouver and the Fraser Valley were polled, with 61 per cent saying they have crossed the border at least once in the past 12 months—compared with 74 per cent in last year’s survey. Of those polled, 37 per cent said they would cross-border shop less often because of a poor exchange rate.

“The weaker Canadian dollar is already making British Columbians reassess their plans,” said Insights West president Steve Mossop in a press release. “Parity made cross-border shopping a very attractive proposition a year ago, but the eagerness has definitely slowed down.”

Compared to the 2013 survey, Canadians report that they will continue to purchase the same types of goods—gas, restaurant meals, clothing, shoes, groceries—but they will seek those deals less often. More than two thirds (69 per cent) of residents said they would continue to cross-border shop as often, 20 per cent said they would cross-border shop less frequently, and 12 per cent said they would shop across the border more.

“As was the case last year, the prospect of lower prices motivates British Columbians to drive to the U.S. to seek better deals,” said Mossop. “Practically nine in ten residents believe that the best way to prevent cross-border shopping is for Canadian retailers to improve their pricing.”

Eighty-eight per cent of Metro Vancouver residents believe that Canadian retailers need to improve their pricing to prevent cross-border shopping, and 57 per cent believe that manufacturers are partly to blame, agreeing with the statement that if manufacturers sent the latest and greatest to Canada, Canadians would not go to the USA to shop.

Despite the slight decline in cross-border shopping, this still equates to significant drain on potential revenue for Canadian retailers.

Image: Insights West