Yahoo Finance Canadian retailers may see a 'grinchy' Black Friday
New data from the Conference Board of Canada paints a potentially sombre outlook for Black Friday shopping in many parts of the country this year, due to a sluggish Canadian economy and sagging consumer confidence.
“It might be a bit of a grinchy season for Canadian retailers,” says Michael Burt, director of industrial economic trends with the Conference Board of Canada. “Consumers are apprehensive right now and retailers are seeing that first-hand.”
Overall, the Conference Board shows that consumer confidence in October experienced its largest decline since the price of oil slipped to $30 U.S. per barrel in January of this year. Particularly hard hit by this news is the province of Alberta, which recently saw its consumer confidence rating approach an all-time low.
Philip Schuman, who lives in Calgary, agrees that the larger economics of oil prices will likely have an impact on Alberta’s retail landscape on Black Friday.
“Alberta is hurting really bad right now,” he says. “Retailers have already rolled out sales to encourage people to get shopping. But frankly, it seems like more people excited about the [American] Thanksgiving NFL games than trying to find a special deal.”
Carly Drake, who is a PhD student in marketing at the University of Calgary, is slightly more optimistic.
She says the appeal for many shoppers on Black Friday is in big-ticket items, particularly electronics.
Although she says she likely won’t be shopping, she is aware of friends in the city who are excited about the prospect of finding a good deal on Black Friday for items such as new televisions or stereo systems.
While the worst impacts are likely to be felt in oil producing provinces like Alberta and Saskatchewan, retailers in Ontario, Quebec, and other provinces aren’t immune from the malaise caused by Canada’s economic slowdown.
In fact, according to a recent national online survey conducted by The Harris Poll for RedFlagDeals.com, more than four in 10 Canadians surveyed said they would not be shopping at all this Black Friday.
Alan Middleton, the executive director of the Schulich Executive Education Centre at York University’s school of business, says that in addition to Canada’s weaker economic outlook, he suspects that the public’s appetite for ferreting out Black Friday deals has reached a bit of a plateau.
“Retailers are fighting against a difficult future,” says Middleton. “It’s not just because of the softness of the economy but because there is not much [economic] optimism for the next year. As such, the public’s interest in this edition of Black Friday appears to be less intense.”
While that thought does little to help part the ominous clouds hanging over the prospect of strong Black Friday sales numbers, it’s a point of view Burt agrees with.
“I think retailers have probably reached a point of [peak interest] from the public,” says Burt. “I’m not sure they can continue to hype [Black Friday] and grow it any more than they already have.”
Moreover, Burt says that data collected over the past decade suggests that the effect of Black Friday has been less pronounced in the provinces of Manitoba, Saskatchewan, and across Atlantic Canada in many key retail categories.
One province that could buck the downward trend in 2016 is British Columbia, says Michael LeBlanc, senior vice president, membership, programs and revenue with the Retail Council of Canada.
“British Columbia is absolutely knocking the cover off the ball right now,” says LeBlanc, who points to the fact that, on a statistical basis, the province’s year-over-year retail growth is presently about double the national average. That strength, he says, is due in large part to a provincial economy that is less based on sectors such as resources and manufacturing.
Nevertheless, despite these tepid economic forecasts, retailers are continuing to push forward.
Craig Flannagan, vice president of consumer marketing with Cadillac Fairview, which owns 12 of the top 25 busiest shopping malls across the country, says that his employer has been working diligently to consult consumers in order to create the right mix of retail outlets that should appeal to the taste of any Canadian shopper at any point in the year.
“At Cadillac Fairview what we are seeing is [Black Friday] is a precursor to holiday shopping when the majority of Canadians are starting to do their holiday shopping.”
Reminding consumers of the fast-approaching holidays, even in a soft economy, is a smart idea, says Middleton.
“It’s a subtle psychological marketing message,” says Middleton. “It helps serve as a reminder to consumers that the time to shop before the holidays is slowly ticking away.”
