Not all retail had a great Christmas

On the heels of a very disappointing end to 2007 for retailers in the US, Canadian retailers are reporting mixed results from the past Holiday season.

The Canadian impact of the poor home market performance of many US-based competitors – A&F was down about 20% - remains to be seen; however, it is plausible that aggressive expansions across Canada may be scaled back to focus resources domestically. One mitigating factor for US retailers in Canada is that sales here are converted to US and so there will be a favourable exchange rate impact at year end.

Some like Best Buy and Forzani (Sport Mart, Sport Chek and a host of other banners) did very well indeed.   However, Reitmans reported that for the five weeks ended Jan. 5, same store sales decreased 4.5 per cent from the same period a year earlier. The challenge for those not selling ipods and Guitar Hero III is that even a consistent unit demand could be translating into sales declines as a result of early and persistent discounting. This year, the Canadian Dollar parity spurred many retailers to lower prices in advance of the normal Holiday period. Balancing this trend is the fact the savvy retailers are stocking new line items at regular price more quickly to take better advantage of gift card redemptions.