Boxing Day: What's Hot?

True to my word, I headed out to busy Yonge St. in downtown Toronto for some Boxing Day shopping. One thing's for sure: shopping still remains a very popular pasttime in Canada! Despite my earlier skepticism about the quality of "deals", there were in fact tons of great ones, and plenty of people out and about to take advantage of them.

Among the most noteworthy in the consumer electronics sector: selected DVDs for $5 and high-definition DVDs (both Blu-ray and HD DVD formats) for $20; and a whopping 1 TB external hard drive (from a reputable brand) for $200! Like we recently saw in the U.S., Toshiba's older version HD DVD player was available for $99 (they were all gone by the time I made it out to the stores). However, the HD DVD add-on player for the Xbox 360 was also available for $150 - $50 less than it's regular price, and it came bundled with a free HD DVD.

Of course, flat-panels were available for excellent prices, with many retailers advertising 42" models for just $1,000. Portable GPS devices were also "hot" items on holiday shoppers' wish lists.

The online arena was just as flooded with consumer traffic. In fact, Amazon.ca reported experiencing its busiest holiday season in five years! In DVD, the online retailer's best seller was Planet Earth: The Complete Series (no surprise, given that it was an Oprah pick); while Josh Groban's Christmas album Noel topped the music sales (kudos to Mr. Groban for managing to out-sell all other artists with a seasonal album!) Super Mario Galaxy for the Nintendo Wii topped gamer purchases; while Adobe Photoshop Elements 6.0 was the best-selling software.

Amazon's "most wished for" list echoed the purchases, although the Nintendo Wii console itself was the most coveted video gaming item; and Apple's Mac OS X Version 10.5 Leopard was the most desired piece of software.

As earlier predicted, most retailers will continue deals through to the end of the week. Enjoy!

[Photo courtesy of http://www.freedigitalphotos.net/].

Beware of Black Friday!

As retailers south of the border gear up for what's traditionally known as "Black Friday" (i.e. one of the busiest and most heavily promoted shopping days of the year), we're all wondering how things will fare. Will customers hoard into stores trying to get the best deals? Most definitely. Will retailers drop prices to record-breaking lows? Very possibly. Will chaos ensue? Time will tell.

Black Friday relates to the date in which retailers historically made the transition from unprofitability (the "red" zone) to profitability (the "black" zone). Since it falls on the day after U.S. Thanksgiving, which is always the fourth Thursday in November, the name Black Friday was born.

In 2006, this day led to record low prices and high shipments in the flat-panel TV arena. With sleeker, more technologically-advanced and already low-priced TVs on the market already, what will Black Friday mean for those playing in the LCD/plasma arena? As retailers fight for a larger piece of the shopper's money pie, how low will prices get, and how ridiculously great will promotional offers become? Judging from a move that Wal-Mart has already made, things could become mouth-droppingly exciting: according to DisplaySearch, the mammoth retailer is already offering a 50" HD plasma TV for less than $1,000 (the same TV sold for about $1,700 just last month). If this is a pre-Black Friday promotion, how cheap will the set be come end of the month??

DisplaySearch reports that Black Friday 2006 accounted for almost 20% of all TV units sold and 17% of revenues for the entire fourth quarter: yes, just that one day! Last year, Panasonic's 42" TH42PX75U was the best-selling model based on revenue, which was sold through Best Buy outlets at an impressive price of $999.

"Black Friday has always been a crucial event for retailers, but because of the surge in demand for flat-panel TVs, it has become an important indicator for selling trends for the rest of the holiday season," explained Paul Gagnon, Director of North America TV Market Research for DisplaySearch. "Brands, retailers, and many others can gain critical insights and develop tactical plans from these early Black Friday results."

With the Canadian dollar so high (and getting higher - it's almost $1.08 today!), Canada/U.S. borders could be more flooded than usual the week of Black Friday. Overly brave Canadians might just attempt being trampled by U.S. shoppers in an effort to cash in on the overwhelming deals.

Canadian Retail Sales Up, Says Stats-Can

Statistics Canada reports that retail sales in Canada rose 0.7% during the month of August, reaching approx. $34.5 billion. Surprisingly, sales from new car dealers took top ranks with 3% growth.

But home furnishing and electronic stores also showed strong growth at 1.5%, representing the second consecutive increase over 1% in the category. This category also rose 10.5% when compared to August 2006! The consistent rise was reported to be due, in large part, to home electronics and appliances specifically, which rose a whopping 3.7% in sales: the most drastic rise seen since February 2005. When compared to the same period last year, the category rose an impressive 15.7%. More good news for the industry: sales in the furniture, home furnishings, and electronics stores sector have not dropped since spring last year.

The strongest sales growths were found in P.E.I. (2.5%) and Ontario (2%), fueled mainly by new car dealer sales. Provinces that experienced a decline in retail sales included Alberta (0.5%); Nova Scotia (0.7%); Manitoba (0.2%); and Northwest Territories (1.7%).

This holiday shopping season will prove a critical one for the retail landscape in Canada. Retailers like Wal-Mart have already made announcements that they'll be dropping prices in the wake of the strong Canadian dollar. Wal-Mart Canada President & CEO Mario Pilozzi presented a letter to the company's suppliers in attempt to negotiate lower prices. Meanwhile, Hudson's Bay Co. also announced that it would slash prices at all 298 Zellers outlets across Canada, due in large part to the rising Canadian buck.

One thing's for sure: the 2007 holiday shopping season will certainly work in the consumer's favour. If there's ever a time to get the best value for your money, this is it. Happy shopping!

Canadian Dollar Will Reach US$1.05 by 2008

CIBC World Markets predicts that the Canadian buck will be worth $1.05 U.S. by the end of 2008, representing the biggest premium since 1960.

"The loonie's flight is far from over," said Jeff Rubin, Chief Economist and Chief Strategist at CIBC World Markets. "By the end of next year, you'll get as much as a nickel back when you trade your loonies for greenbacks."

Last month, Lee Distad gave readers a piece of his mind on this blog about the disparity between retail pricing in the U.S. and Canada on consumer goods. In short, he argued that contracts were signed months, maybe even a year ago, and to change pricing now to work in line with the current exchange rate would leave Canadian retailers feeling the pain. With the rise in Internet sales over the last few years, will they be feeling the pain anyway? After all, as it stands, I can buy product X at a Canadian store for $20.00; or purchase it online from a U.S. retailer for something like $18.00, plus shipping and handling. As the gap between the Canadian and U.S. dollar begins to widen, it will eventually make purchasing from across the border even more enticing.

Of course that doesn't hold true for all products and in all situations: in many cases, the after-sales service, and peace-of-mind that you're dealing with a retail outlet around the corner from your home is worth the extra few bucks you could end up paying in Canada. Plus, sometimes waiting for a product to be shipped isn't something the customer's willing to deal with. But we have to be honest: in some situations, the U.S. might be seeing more Canadian dollars than we would like them to.

Distad was correct in predicting that this holiday shopping season will see a price war like no other: but Canadian retailers won't only be competing with one another for Canadian consumers' bucks: they'll also be competing with our neighbours to the south, through things like across-the-border and Internet shopping, in a way they haven't had to deal with in years.

On a related note, Rubin adds that the rise of the Canadian dollar over the U.S. is due largely in part to the shift in "global terms of trade over the last decade, which has seen economic value-added migrate from information technology back to resource rents under the ground." Such shifts are obvious when looking at countries like Dubai, which has raised its profile over the past few years with modern and futuristic real-estate projects like man-made islands and indoor ski hills, and has attracted the attention of corporations from all other world, which have since set up shop in the country's financial district.

It will be interesting to see how the countries of the world are positioned 20, and even 10 years from now.