Retailers expecting a 'mostly merry Christmas' at the till

Unseasonably warm weather in much of Canada may have hampered the start of the holiday spending season, but a 'mostly merry Christmas' still likely across retail-land, forecasters predict.

Warm weather slowed start of holiday shopping but, the good news, many fewer shipping delays

Canadians spent 9.6 per cent more on Black Friday and 14.1 per cent more on Cyber Monday this year than in 2014, according to a report by Moneris. (Cathy Alex/CBC)

Canadians may not yet have taken down the Christmas lights or finished off the last of the leftover turkey, but the question of just how much they spent this holiday season to help buoy a turbulent economy is already being broached.

It's too close to Christmas to know exactly how much Canadians spent on holiday cheer. But unseasonably warm weather in much of Canada suggests a sluggish shopping start that may have been followed by a slight increase in spending over this time last year when oil prices were first crashing and the economy was drifting recession-ward.

In November 2014, retail sales rose by less than half a per cent over the previous year, according to Statistics Canada. Last December, they were down two per cent, which was the steepest decline since 2010.

This year "we were predicting... a solid, mostly merry Christmas," says Michael LeBlanc, the Retail Council of Canada's senior vice-president of marketing and digital retail.

Sometimes it takes a bit of frost on the leaves and snow on the ground for people to realize that, 'Oh my goodness, it's time to go shopping for Christmas.'- Michael  LeBlanc , Retail Council of Canada

The council is estimating increases of between four and five per cent in retail sales this holiday season.

And Canadian spenders likely helped stores reach that target towards the end of the holiday shopping rush, LeBlanc says.

Warm weather hampers shopping start

LeBlanc pegs the sluggish beginning on unseasonably warm weather in parts of Canada, particularly Ontario and Quebec, which put stores in a tough spot as snow and other signs of winter tend to trigger Canadians into holiday shopping action.

"Sometimes it takes a bit of frost on the leaves and snow on the ground for people to realize that, 'Oh my goodness, it's time to go shopping for Christmas,'" LeBlanc says.

The unseasonably warm weather also likely means certain items — like winter sports equipment and apparel — didn't sell as well as years prior.

Winter wear "is typically a big Canadian Christmas purchase" for personal use and gift giving, says Ed Strapagiel, an independent retail consultant.

But, those purchases are often prompted by bad weather reminding Canadians how necessary a new pair of boots or down parka might be.

"We are procrastinators," he says. "We do need something like terrible weather to really get out there and do something about it."

Even though the weather is expected to get somewhat colder in the coming months, LeBlanc says some of those seasonal items, like shovels, won't be flying off the shelves. People are likely to decide to make do with what they have for the remainder of winter by that point, he says.

Black Friday, Cyber Monday prompt shoppers

Still, the greener weather doesn't mean Canadians channeled the Grinch over the holidays. 

FedEx blamed its 95.5 per cent on time delivery rate in the States on bad weather and last-minute purchases. (FedEx)

These days, LeBlanc said, the Black Friday and Cyber Monday discount phenomena surrounding U.S. Thanksgiving help build holiday-shopping momentum when the weather fails to step up.

Canadians shopped for clothes, sports equipment and household items on both days this year, according to a report by Moneris, a company that processes credit and debit card transactions. 

Shoppers spent 9.6 per cent more on Black Friday and 14.1 per cent more on Cyber Monday this year than in 2014, according to the report.

That momentum appears to have continued past late November.

On December 23, people spent more than $1 billion using Interac debit and flash payments in Canada, according to data compiled by the company. That's a seven per cent increase over last year.

Fewer shipping woes in Canada

Canadians also seem to have done more shopping online than usual.

FedEx delivered a record-breaking number of packages the week before Christmas, wrote a company spokeswoman in an email. Amazon's Canadian site also shipped a record number of packages over the holidays, according to a company statement.

Canada's so-far warmer weather helped the country avoid some of the big delivery delays experienced by American shoppers.

In the U.S., FedEx delivered 95.5 per cent of parcels on time, while its competitor UPS delivered 96.2 per cent, according to data from ShipMatrix, which helps companies with their shipping operations.

FedEx expanded its delivery efforts to keep up with demand and blamed its late deliveries on bad weather in the States and a large number of last-minute purchases, reported the Associated Press. 

FedEx did not experience similar problems in Canada, a company spokesperson said. Purolator and UPS delivered more than 97 per cent of packages on time in the country, according to ShipMatrix's data. 

Full picture to come

Strapagiel, who predicted "a pretty modest" Christmas, warns against reading too much into these early numbers because they may not be representative of the whole market. Interac's numbers, for example, only take into account Interac transactions.

The Retail Council expects to have its prediction verified in February; while Statistics Canada's most recent retail trade report is for the month of October.

If the retail sales growth numbers fall within the range Strapagiel predicted — potentially lower than 2.5 per cent — there is still some good news on the horizon.

He expects a slow start to retail sales growth in 2016, but picking up over the course of the year.

"Next Christmas, 2016, will be better."

With files from the Associated Press


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