Cross Border Shopping Not Too Serious

Anthony Fontanelle
December 14, 2007

The increasing value of the loony has caused analysts to be alarmed as it is expected that cross border shopping will be rampant. Indeed, statistics have shown that vehicle sales from cross border shopping has increased sharply. With the Canadian dollar increasing in value, Canadian consumers are finding it more convenient to purchase vehicles across the border.

Canadian consumers can save thousands of dollars if they purchase vehicles in the United States especially if they purchase a high end vehicle. With the demand for vehicle still increasing in Canada despite predictions that it will go down before the end of the year, cross border shopping for vehicles has increased.

The Toronto Star though reported that experts are confused about the true status of cross border shopping. Statistics Canada announced that cross border shopping is minimal. "Today's cross-border shopping volumes pale by comparison with the phenomenon observed during the late 1980s when the exchange rate was also rising," according to the study by Francine Roy.

Experts pointed out that what is happening today is not comparable to what happened in the late 80s and early 90s when the Canadian dollar was on the rise. During that time, same-day auto trips were rampant. These trips are used by statisticians as proxy for the number of cross border shoppers. Today, the number of same-day auto trips to the United States from Canada is not as high as it was in the 80s.

Same-day trips though is not a good basis for cross border shopping as the advent of the World Wide Web has increased the number of purchases that can be made without leaving the country. Through the Internet, consumers can purchase different goods from home decors to auto parts such as the air mass meter Canada. So in order to gauge the volume of cross border shoppers, statisticians took into account the number of packages being sent to Canada from the United States.

The study found out that the number of packages sent to Canada has increased a bit but does not warrant a conclusion that cross border shopping has increased exponentially. In fact, cross border shopping is not as rampant as it seems to be. Although vehicles bought in the United States has increased sharply, it only amounts top about two percent of the total new vehicles purchased by Canadian consumers.

Although statistics point out that there are less cross border shoppers this time compared to the late 80s and early 90s, there are still experts who believe that the method used is no longer applicable today. Case in point is the number of same-day auto trips. Experts are pointing out that Canadians are now spending a night or two across the border.

Source:  Amazines.com