Canadian back-to-school spending to grow 4%, highest since 2008

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(Montreal, 31 July 2013) With a relatively robust economy, more shopping choices, improved consumer confidence and momentum from the tail end of the spring season, 2013 back-to-school spending in Canada is set to climb 4% over last year, the highest growth level expected since the financial crisis, according to EY.

“While back-to-school items have always been considered essentials, positive economic indicators and increased consumer confidence are driving parents to not only get their children what they need, but also what they want for going back to school,” says Daniel Baer, EY Partner and Canadian Retail and Consumer Products Sector Leader. 

Traditional items like clothing, shoes and stationery will continue to drive sales. However, a lack of any “must have” items means that electronics, computers and tablet spending will be flat to negative. 

Discount, department and dollar stores will continue to benefit the most this back-to-school season.  Promotions at these stores to fight for and attract the back-to-school shopper are already underway.  Baer explains: “The recession didn’t turn Canadians into cautious shoppers. They are, and have always been, as prudent and conservative as US shoppers have now become, and these types of stores thrive in such an environment.” 

The comparison between Canadian and US shopping behaviour and habits is more important now than ever before, as US retailers head north searching for new opportunities.

“With the influx of prominent US retailers, the Canadian retail market is in full transformation mode,” notes Baer. “The new players are pushing Canadian retailers to respond quickly, including with more aggressive pricing strategies, better selection, increased use of social media and sharper online offerings. That’s something parents will appreciate.”

To successfully hold their ground in the face of emerging US competition, Canadian retailers will need to be very flexible, responsive and dedicated to delivering a unique offering.  They will need to view the competition worldwide, as online retailers aim to take a share of the retail Canadian marketplace as well.

“This back-to-school shopping season will be a good indicator of how ready Canadian stores are to fight in this increasingly competitive environment,” concludes Baer.

Alberta, Saskatchewan and Newfoundland and Labrador are expected to lead retail sales through the back-to-school season, with Quebec and Ontario closer to average expectations.

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