Good news, Canuck shoppers. U.S. clothing retailer Express, Inc. announced it has carried out its move to parity pricing for Canadian consumers.
“The company's progressive at-par pricing ensures that consumers across North America can enjoy the same shopping experience and value, regardless of geographical location,” the retailer said in a press release.
Express has 11 Canadian stores, and plans to open up to 50 more in the future. Its first Canadian store opened in 2011, and at that time Michael Weiss, now the company's chairman and CEO, said prices would "be on average a low double-digit [per cent] higher than in the U.S."
“We have costs that are very measurably higher and that is a fact of [doing business in Canada],” he said, according to the Financial Post.
As more U.S. retailers expand their businesses north, price parity remains an issue in Canada.
Target’s recent arrival in Canada was met with reports that the stores were comparable with Wal-Mart, but exceeded prices in U.S. stores.
A recent report identified a number of reasons why Canadians often pay higher prices than U.S. consumers, including tariffs and higher input costs, to name a few.
Last year in a HuffPost Canada article, experts also pointed out Canadians don’t shop as aggressively as American consumers, and even noted a perceived willingness to pay more in Canada.
The Canadian dollar has risen from around 62 cents U.S. in 2002 to around $1.03 U.S. at present. What this means is that, from the perspective of international retailers, we're spending a lot more in stores. Colliers Canada reports that Canadian shopping malls brought in 50 per cent more in sales, per square foot, than their U.S. counterparts in 2011. While U.S. malls earned $400 U.S. in revenue per square foot, at Canadian malls it was around $600 U.S.. That's a powerful magnet for U.S. retailers looking to expand.
Remember Zellers? How about Eaton's, or Woolworth's or Simpsons? A&A Records, anyone? Those are just a few of the retail names that have disappeared or are disappearing from Canada's street fronts and malls. With traditional retailers fading, U.S. retailers are seeing opportunity left and right. They are also seeing vacant space they can easily convert to their own stores, as Target Canada is doing with Zellers locations and Nordstrom Canada is doing with Sears stores.
Growth in Canada's retail sector was 34 per cent faster than it was in the U.S. between 2004 and 2008, according to data from the Retail Council of Canada -- and that's before the financial crisis sank the U.S. into an economic no-man's-land. The Council's data also shows that retail grew 96 per cent faster than the Canadian economy as a whole during that period.
In the U.S., retail supports one-quarter of all jobs and accounts for about 18 per cent of the country's economic activity. By comparison, Canadian retail supports only about one-eighth of all jobs in the country, and retail accounts for just more than six per cent of all economic activity, according to a report at Nasdaq.com. This would suggest that the U.S.'s retail market is saturated, while there is plenty of potential growth in Canada.
The U.S.'s persistently high unemployment rate in recent years has left many Americans with little cash for buying anything beyond the basics. Data from WSL/Strategic Retail shows that only about 50 per cent of Americans have disposable income, but the same is true for 64 per cent of Canadians.
Canadians often complain that our options for online shopping are more limited than in the U.S., and that seems to show in our shopping habits. Research on women's shopping habits finds that only about half of Canadian women shop online, compared to 75 per cent of American women. That means more opportunity for brick-and-mortar stores planning to move into Canada.
The same study of female shoppers found that, while 68 per cent of American women use coupons when shopping, only 55 per cent of Canadian women do. Half of Canadian women look online for coupon opportunities, compared to 61 per cent of Americans, and 57 per cent of Canadian women pick up in-store circulars, while 71 per cent do so in the U.S. This lack of hunger for bargains translates into bigger profit margins for retailers.