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Greater Victoria retailers bracing for uncertainty heading into the Christmas season

Inflation top concern for retailers, according to Statistics Canada
The 2022 Christmas retail season on the Saanich Peninsula is unfolding against the backdrop of inflation and other factors. (Wolf Depner/News Staff)

Will the important Christmas season deliver a lump of coal for retailers? Or will shoppers stuff their stockings?

The answer is not entirely clear with available data favouring light over shadow.

Al Smith, executive director of the Saanich Peninsula Chamber of Commerce, said he has not heard any major complaints from local retailers. Shop-local campaigns throughout the region have received good feedback. “Everyone is excited and happy about that … I do think there is a little bit of nervousness out there around what is happening economically for the country.”

This ambiguity — a generally positive local retail environment but uncertainties about the broader national picture — has made this retail season one of the more difficult ones to predict, Smith said.

“There are a lot of little unknowns to the season that are going to make it challenging for retailers to really know ahead of time if this is going to be a normal Christmas.”

Retailers are also coming out of the pandemic. “But that was almost less scary than what is happening economically for the country.”

During the pandemic, governments pumped money into the economy to maintain purchasing power, he said. “The challenge during the pandemic were the supply lines — not the demand for our services and our products.”

The current situation appears reversed. “What is the demand for the services and products?” Smith asked. “We don’t know what the retail behaviour is going to be like until we are in it.”

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Available figures paint a mixed picture in terms of trend lines.

Retailers can find some comfort in figures from the Retail Council of Canada. Its annual holiday shopping survey of over 2,500 Canadians from coast to coast found that each Canadian plans to spend about the same amount — $790 — as they were planning to spend in 2021 ($792), despite the fact that six out of 10 Canadians expressed concerns about their finances. In fact, surveyed British Columbians said they anticipate spending more than the national average this holiday season ($887). British Columbians are also most likely to have a loose budget or no budget at all — 46 per cent versus 38 per cent nationally.

Surveyed buyers also expressed a preference for local shopping. Three out of four said they feel it is important to shop locally and 42 per cent plan to shop at local retailers this year.

But retail sales heading into the winter decreased 0.5 per cent to $61.1 billion in September, according to Statistics Canada. Retail sales in British Columbia dropped two per cent.

A closer look at the official figures also shows that seven of 11 sub-sectors in retail recorded lower sales, including sales of items sold in sporting goods, hobby, book and music stores, which dropped 1.5 per cent. Sales of items sold through electronics and appliance stores also dropped by 0.6 per cent. This said, sales of items sold through clothing and clothing accessories rose 1.7 per cent while sales of items sold through furniture and home furnishings stores rose 1.4 per cent.

Unofficial figures also show that retail sales increased 1.5 per cent in October, perhaps a reflection of the discounts that retailers have been offering since mid-fall to get a start on the Christmas retail season, which is unfolding against the prospects of inflation, a concern among retailers.

A survey of businesses for the period from October to early November by Statistics Canada found rising inflation as the top obstacle, which businesses expected over the next three months. Retailers especially worry about inflation with nearly three out of four identifying inflation as the top obstacle.

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Wolf Depner

About the Author: Wolf Depner

I joined the national team with Black Press Media in 2023 from the Peninsula News Review, where I had reported on Vancouver Island's Saanich Peninsula since 2019.
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