Cross Border Shopping

I’m in Canada, and every Christmas, we make at least one trip to the US to do some shopping. We don’t necessarily buy a lot there, but it’s just interesting going and seeing some of the Black Friday madness and occasionally picking up a deal or two.

This year we didn’t go on Friday, we went on the following Monday. It was a Monday evening, so maybe that’s a light time to be shopping, but still, it’s December, and a lot of stores still had sales on.

Two observations:

1. Traffic was light. The stores were empty. Maybe everyone was just shopped out.

2. Prices in the US are currently not worth crossing the border for.200812040726

10 or 15 years ago, there was a good reason to shop in the US: A lot of stuff came out in the US before it did in Canada, or just wasn’t available in Canada. These days, Canada gets treated like a real market, and the big box stores have taken over here the way they have in the States, so we’re pretty close to parity on product availability now.

Then last year there was a different good reason to shop in the US: Things were cheaper. A lot cheaper, because the Canadian dollar was doing so well. Six months ago, people were crossing the border in significant numbers to buy expensive items like cars in the US and saving thousands of dollars doing so, even after all the costs associated with bringing the car over the border.

Today, things are different.
Many products have been repriced to reflect a dollar at parity. A Mac Pro at the Apple Store in the US is $2799, and the same computer in the Canadian store is $2899, less than a 4% difference. The Xbox 360 is priced identically in Canada and the US.

But while retailers were adjusting for the dollar at parity, the economy played another trick on them. The Canadian dollar is now back down to 79 cents US, meaning that that Xbox 360 for $299 in the US is about $360 Canadian. Why would I shop in the US?

This is a temporary state. Products in stores today in Canada were purchased and shipped to Canada months ago, when the dollar was at parity. Once these products are off the shelves, prices will go back up.

In summary: Now is a good time to buy stuff in Canada.