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closeIt looks like we have the Canadians to thank for strong retail sales numbers during the holiday shopping season.
On Thursday the Washington state Department of Revenue came out with its fourth quarter retail sales numbers, and Whatcom County communities saw some healthy year-over-year increases in retail trade sales. Retail trade focuses on sales that are made at stores and businesses. It does not include items that don’t get hit with the retail tax, such as gas or some types of food.
While the state average increase was just 2.7 percent, Bellingham was up 7.4 percent. The border towns of Blaine (up 12 percent), Lynden (up 12.8 percent) and Sumas (up 18.2 percent) saw a big boost in sales during the holiday season, an important time of year for retailers because what happens between October and December usually determines whether a store has had a good or bad year.
Before the Canadian dollar hit parity, retail trade in Whatcom County had been slowing. In the third quarter of 2007, sales increased just 3.1 percent year-over-year. Overall retail sales had historically been rising around 6 percent locally.
As we head into the spring and summer tourism season, Whatcom County should continue to see more Canadians than the previous year, said Chris Lawless, chief economist for BC Investment Management Corp. in Victoria, B.C. With the Canadian dollar continuing to hang around parity, the economy in British Columbia continues to do well.
“We’re not talking about recession up here, but many are concerned about what they are hearing about the U.S. economy,” Lawless said. “In British Columbia, job growth is strong, to the point where we still have job shortages in some sectors. Residential real estate should start to slow down, but we don’t have as many subprime or credit issues, so it shouldn’t cool off much. The slowdown in residential will be made up in all the big commercial and government projects that are being completed for the 2010 Olympics.”
Two things could be a dampening factor, he said: the border and fuel prices. Canadians may decide they don’t want to deal with the long waits at the border or pay for the cost of travel. The price of gas in Canada is around $1.19 a liter, or $4.50 a gallon, he said.
“I don’t think the price of gas is a large enough gap to prompt Canadians to go into Whatcom County just for gas, but they will continue to fill up if they are down there shopping or vacationing,” Lawless said.
During the fourth quarter, there was speculation on whether folks from British Columbia would be buying here in Whatcom. The Canadian dollar blew past parity of the U.S. dollar in the fourth quarter, so they suddenly had better purchasing power in Whatcom County. However, the retail landscape had changed since the last time the loonie was strong in the early 1990s; now many more U.S. stores are in British Columbia. Also, major construction was getting started at the border, so that might put a damper on Canadian shopping in Whatcom County if they are worried about long
border waits.
However, Canadians can still find some deals for brand-name products, whether it is because the retail price is cheaper or because there are fewer taxes.
“Overall, consumers in British Columbia are fairly optimistic about how things are going, and they know their dollar is still strong,” Lawless said. “The economic numbers indicate that Whatcom County should see more people from British Columbia than last spring and summer.”
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