Cross-border myth

July 8, 2008
Winnipeg Sun
Written by: Chuck Davidson

High Canadian dollar not sending 'Tobans south to spend

We get asked a lot at the Winnipeg Chamber of Commerce about the impact the high Canadian dollar is having on the province of Manitoba.

There is no question the high dollar negatively impacts Manitoba's manufacturing sector and is one of the variables that has caused a reduction in tourism to the province.

But when we're asked whether it's impacting Manitoba's retail sector, with more people traveling to the U.S. to spend money, the evidence just isn't there.

According to the Retail Council of Canada, retail sales in Manitoba totaled over $14 billion in 2007, up from $13 billion just a year earlier.

FIRST-QUARTER SALES UP

Retailers are Manitoba's third-largest employer, with more than 70,000 people working in the sector.

In addition, Statistics Canada's most recent numbers indicate that in the first quarter of 2008 retail sales in Manitoba increased by 10.4%, well above the Canadian average and only behind retail sales numbers in Saskatchewan.

The reality is that retail in Manitoba has changed dramatically in the past decade.

In that time major retailers like Wal-Mart, The Home Depot and Rona have moved into Winnipeg and are key anchors in power centres in various parts of the city. No longer is the corner of Kenaston and McGillivray boulevards a farmer's field. It's now home to six major big box stores and has attracted movie theatres, restaurants and a variety of other retail outlets to the area, with even more on the horizon.

This increase in development is being driven by the change in the typical Canadian shopper. According to a report on retail published by Deloitte, the average Canadian shopper is older, time-pressured, connected to the Internet, discerning and focused on their well-being.

In addition, a one-size-fit all shopping experience no longer applies and our expectations about quality for the price paid are rising.

What appears to be happening in Manitoba is that even though we have lower average wages, our low cost of living puts more disposable cash in the pockets of residents and our busy lifestyles lead us to be decisive in our shopping habits.

The retail sector can often be used as a barometer for the health of a provincial economy. One of the first signs an economy is slowing down is that consumer spending confidence drops and people put off purchases they may have been contemplating.

The Conference Board of Canada's most recent report on consumer spending confidence revealed that it is at its lowest level in more than seven years.

This may be the case for other provinces, but Manitoba may be immune from this as retail development shows no signs of slowing down, with plans in the works for expansion in the Polo Park area and a number of other locations.

The one thing about retail is that if there isn't increased demand, development won't happen.