MONTREAL — Canadian retailers have no plans to reduce prices for the holiday season, even though an industry report suggests a strong Canadian dollar is luring more cross-border shoppers.
Apparel retailers claim they're already price competitive with U.S. merchants and see no reason to cut prices further.
At Reitmans, the country's largest specialty women's retailer, prices have stabilized or come down slightly due to a strengthening Canadian dollar over the last three years, and the company has no plans to cut prices further for the holidays, according to president Jeremy Reitman. The same applies to yoga clothing retailer Lululemon, which recently went public and whose goods are also sold in the U.S. It said "no price action is planned" for holiday shopping.
Sears Canada also has no plans to cut prices anytime soon, although a spokesman said apparel prices have dipped slightly in the last year. Sears Canada is seeking retroactive rebates back to 2005 from suppliers due to the strong currency, a move at which the apparel industry has balked.
Canadian retailers have come under fire recently for not lowering prices even though the currency has appreciated by about 46 percent in the last four and a half years against the U.S. dollar and has been trading at or near parity for more than a month. The strength of the Canadian dollar should translate into cheaper imports since most products are priced in U.S. dollars.
As a result, retailers have room to start cutting prices and luring Canadians away from cross-border shopping, according to a report from brokerage firm National Bank Financial. Retailers are enjoying record profits and can pass along some savings to consumers, the report added. About 80 percent of Canadians live within 100 miles of the U.S. border.
"Consumers are justified in complaining, and retailers should be leaning on manufacturers and importers to reduce their costs," said retail consultant John Williams of J.C. Williams Group in Toronto.
Apparel and electronics are two sectors of the Canadian economy where prices have dropped, but maybe not as fast as consumers would like, said Bob Kirke, executive director of the Canadian Apparel Federation, an Ottawa-based lobby group.
"Nobody is gouging anyone, and don't forget what's in stores now was ordered six months ago, so pricing has to reflect that," Kirke said.
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