Friday, July 27, 2012

Winnipeg Makes U.S. National News - Cross Border Shopping

A weekend Grand Fork Herald story went national in USA Today about cross border shipments from stores such as Lowe's Home Improvement and Menard's. It was reported here on my blog quite some time ago abour how Menard's advertises in Winnipeg and ships so regularly that trucks leave at least twice daily bringing goods to Manitoba. Lowe's Home Improvement is now doing the same. And product shipped from Grand Forks in spreading out across Canada via Winnipeg.

From the Herald:
Shoppers from Manitoba have a tendency to travel far from home for a good deal, but their bargain-seeking is particularly evident when it comes buying things for their homes.
“At least once a day, maybe twice,” is how often Chris Nero, store manager at the Grand Forks Menards, said he has a truck delivering purchases north of the border. “We keep getting busier with Canadians every day.”
While many big retailers in the Grand Forks area draw crowds of Canadian shoppers, home improvement and building supply stores such as Menards and Lowe’s have been especially popular with travelers prepared to spend large sums for big projects and willing to go a long way for the savings available here.
“You see a lot of trailers in parking lots,” said Sandy Dobmeier, visitor services manager for the Greater Grand Forks Convention and Visitors Bureau. She has heard of cases in which shoppers could get a savings of $5,000 by shopping in the United States.
In an otherwise downbeat budget, the federal government under Stephen Harper allowed for ever greater amounts to be able to brought in duty-free from visits to the U.S. Many Winnipeggers are taking advantage of this and buying right up to $800 under the new rules.

And deliveries from the U.S. increase all the time.

From the Herald:
Menards has offered delivery service to Canada since 2007. Lowe’s began offering it in 2011 and makes two or three deliveries a month.
Even with the added cost of delivery, which the stores declined to provide, the savings are still an incentive for people to spend their money in the United States and ship their purchases home.
“They’re telling us the products they’re purchasing in Winnipeg is sometimes twice and even three times what they’re paying here,” said Melissa Bartak, assistant store manager for Lowe’s in Grand Forks.
A banner hangs near the entrance of the store informing Canadian shoppers of the delivery service. Lowe’s also places fliers advertising delivery at some area hotels.
The Grand Forks Lowe’s is the chain’s first store to offer delivery to Canada, and it trucks goods beyond Manitoba. The chain could eventually expand deliveries to other stores near the border, according to Bartak.
“We’ve gone as far west as Alberta and as far east as Nova Scotia,” she said. “It’s been a really good start to the program.”

However, even without the staying a few days, Winnipeggers are taking advantage of U.S. prices, selection and service. For example, free shipping from many companies within the U.S. has created a huge border warehousing program. In many towns just over the border, Canadians use a post box to receive goods. It has become such a huge industry in the U.S. that the Canadian government really needs to look at what they can do to make things better in Canada. Likewise, Canadian businesses sometimes find it useful to drive down to the States to use cheaper postal delivery service there.

Even the steady economy in Manitoba and more home starts has done nothing to mitigate people's desire to buy in the States for a variety of items.

From the Herald:
The Grand Forks Menards is not the only Menards to make cross-border deliveries, but the service has helped make it one of the top stores in the nation, Nero said.
“We’ve been up as far as Thompson and The Pas,” he said.
Both towns are in the middle of Manitoba’s northern region.
Like other cross-border retail in Grand Forks, the demand for home improvement goods is based in part on prices, usually lower in the United States because of Canada’s higher tax rates. But it is also based on the selection of retailers and a building boom in Manitoba.
“We are in a very aggressive new housing market now,” said Mike Moore, president of the Manitoba Home Builders’ Association.
Housing starts in Winnipeg were the highest in 25 years in 2011, he said, and are poised to set another record this year.
While the Home Depot has stores in Manitoba, including four in Winnipeg, Lowe’s and Menards have not followed.
“There’s always been a history of do-it-yourselfers always going down to Lowe’s or Menards,” Moore said. “It’s a store you don’t have so you want to go there.”
Moore also acknowledged that price differences could be large between the two countries, and that reports of prices in the United States being 50 percent lower than in Canada were believable.
“There’s no doubt our taxes are higher,” he said.

If this has the Harper government worried, they haven't shown any sign of it. The higher Canadian dollar hasn't seemed to have the effect of lowering prices on as many goods as Canadians would like. And they are showing their disgust by shopping down in the States. Some people have mentioned that it is the taxes that make the difference. That is a bit of a cop out. We pay higher prices even in Alberta which has no provincial sales tax. The 50 percent margin mentioned in the article is simply not just taxes but the fact that companies in Canada have higher margins.

From the Herald:
Nero and Bartak said their Canadian customers buy everything from kitchen cabinets, bathroom vanities, windows, doors, flooring and lumber. For projects that add up to four and five digits, 50 percent off is enough of an incentive to travel to North Dakota, even with the added cost of shipping.
“It’s still worth it,” Nero said. “And I think they like to come down and get a motel and go out to eat.”
The Grand Forks Herald article got noticed nationally. The fact that Grand Forks Menards is the busiest in the U.S. because of Canada is a wake up call.

Our provincial and federal governments have hung the "Gone Fishin'" sign up and won't rouse themselves till Fall. Meanwhile business is drifting south fast.

No comments: