Canadian Retail Prices Not Adjusting to High Loonie

A report by National Bank Financial confirms what every Canadian already knows, shopping prices in Canada haven't gone down as the Canadian dollar climbs. The dollar is now at parity with the American dollar, however, prices for many retail items remain higher than in the US. These retailers are benefiting from record profit margins, however, these retailers aren't passing their gains to consumers. Canadian retailers such as Sears and Reitmans say that they won't be cutting prices. With the holiday shopping season nearly here, Christmas shoppers in Canada aren't likely to see any savings.

As the Canadian dollar rises it becomes cheaper for Canadian retailers to buy goods from the United States. American goods are paid for in US dollars. With the dollar equal to the US dollar it's cheaper for retailers to buy products to sell there. However, none of this savings is being passed on to consumers. Retailers are keeping their gains resulting from a favorable exchange rate. Many shoppers feel that Canadian companies are gouging consumers by pocketing the gains in exchange rates. Companies respond by saying that they have higher costs such as transportation.

As Canadian consumers come to perceive the inequality between Canadian and American prices for goods it's likely that more and more of them will cross the border to shop. These retailers may lose sales to US retailers. So far this isn't a concern for major retailers. This Christmas season may prove to be highly profitable for these retailers as they will benefit from the rising Canadian currency.

Kyle Ware has been a writer for the past 5 years and his articles appear in several notable websites. He currently authors articles for sites such as:

http://www.virtualvancouver.com

http://www.webmaster-revenue-programs.com/

http://www.createforms.com

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