The Canadian dollar jumped in value again today. Are you fist-pumping yet? I’m not. I mean, how excited can I get when a rising loonie doesn’t translate to cheaper prices at the store? Not only do we have inflation on our hands, Canadians still pay more for American goods even though the loonie has gained 30 percent against the U.S. dollar since 2009.
We’re not talking small price differences here — for some high-demand items like books and mobile devices, we’re paying a whopping 20 percen more, according to this report by BMO Economics. Why are we paying more?
Well, apparently we can blame ourselves (at least in part). According to experts quoted in this story from The Canadian Press, Canadians tend not to comparison shop the way consumers do in the U.S. Instead, we just go to our favourite store and buy what we want — even if it’s $10 cheaper down the road.
A big message — the cost of U.S. goods will not go down in Canada until we change our shopping habits and support stores with the lowest prices. Here’s what University of Toronto marketing professor David Soberman said in the article: “For consumers in Canada who want to get better prices, what you need to do is check all of the retail stores where you can buy the product and patronize the store that has the lowest price,” he said.
Experts also say we Canadians are willing to travel a long way to buy what we want — all the way to the States, where we pick up things like electronics and clothes. That’s not exactly news. There are bus tours that cross the border to outlet malls. And last week on vacation I bought both my kids all their summer clothes in Florida at Target — for a fraction of what similar-quality items would have cost us here in Canada. In fact, we budget for purchases like this every time we travel stateside — it’s hard not to be tempted by prices that are so much cheaper than they are here.
I’m not sure I agree with the conclusion that Canadians don’t shop around enough. Sometimes it’s just impossible to do (you can’t find those Gap jeans at Banana Republic, for example). And it’s not like we have the same vast number of cheap retailers that can be found all over the U.S. Although I am curious to see how Canada’s Target stores will compare with those in the U.S.
Do you agree that Canadians don’t demand lower prices by shopping around?