Early indications suggest Canadian retailers saw no sales growth this holiday shopping season as consumers focused on their finances rather than the urge to splurge.
Major retailers are reporting flat Christmas sales this year and low turnouts for Boxing Day shopping, according to retail consultant Jim Danahy of CustomerLAB, which works with companies in all categories including drug, department, food and specialty stores.
“If anything (this year’s sales) will be a little bit on the disappointing side because we’re not seeing the crowds in the stores,” Danahy said.
In the U.S., retailers reported holiday sales rose 3.3%, a solid increase, but still behind last year’s 3.8% pace.
As well, U.S. merchants also had to mark down merchandise to get shoppers to buy in the face of a challenging economy, which resulted in a string of retailers reducing their earnings outlooks.
Canadian retailers did not discount to the degree their U.S. counterparts did and instead operated with reduced inventories to avoid the risk of being left with piles of unsold stock, Danahy said.
Retailers north of the border most likely saw flat margins and flat dollar-for-dollar sales compared with a year ago, he added.
“There was no opportunity for wow,” he said.
“Even if customers had surprised retailers by coming out in droves – and they didn’t – there was no chance of having a bumper crop this year because inventories were held low.”
Holiday shopping sales at clothing chain Reitmans (Canada) Ltd., which also owns chains like Smart Set and RW& Co., saw December sales fall 0.1%.
Reitmans also said same-store sales dropped 0.4%, suggesting that the key Christmas shopping season was affected by consumer caution.
Some retailers attempted to introduce Black Friday, but it was a flop and even has Boxing Day waned as big shopping event, he added.
However, Danahy noted there is still time for sales to improve due to an extended shopping season this year as schools are closed this week and many government and bank employees were still on holiday.
