Cross-border shopping costs greater than believed even as gap narrows: report
The assessment of costs comes from the bank’s deputy chief economist, Doug Porter, in his latest price gap comparison between consumer goods in Canada and the United States.
http://ca.finance.yahoo.com/news/cross-border-shopping-costs-greater-135040146.html
The assessment of costs comes from the Bank of Montreal’s bank’s deputy chief economist, Doug Porter.
“Porter said Thursday that although the price gap has narrowed to 14 per cent on average from the 20 per cent he found in last spring’s survey” – Guess he hasn’t bought milk, eggs or butter in the U.S..
“There are already more than 50 million visits to the U.S. by Canadian residents annually” – No surprise here, if more Canadians lived within two hours of border number would double.
“the Retail Council of Canada blamed multinational distributors that charge Canadian retailers more than those in the U.S. for brand items as the main reason for the gap. Other factors that have been cited include federal duties, less competition in Canada and higher transportation costs.” And what about rent, taxes, protectionism, marketing boards etc.
“But Porter said with few exceptions, prices have become more competitive in Canada over the past year.” Porter cautioned that with only 18 items sampled, his findings are not necessarily representative of the average price difference between the two countries.”What planet is this guy on? Let’s have some real life examples. Readers of this Blog know that 25% or more is average.
Regarding ““the Retail Council of Canada blamed multinational distributors that charge Canadian retailers more than those in the U.S. for brand items as the main reason for the gap.” I have experienced this myself. A local sporting goods store carried McDavid sporting equipment. However, they didn’t sell the item I wanted. So, I ordered the item from the retail store. After lots of grief and my item finally coming, they manager needed to charge me about 50% more than originally quoted because he needed to make at least something off the sale. Long story, short, the retailer was charged US retail price from his distributor for the item. I told him, “Dude, your getting screwed by your distributor. He is selling it to you for retail, not wholesale.” He was surprised and thanked me for the information said he would look into this and see what was going on. He genuinely seemed perturbed that his dealer would do that to him.