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Going 'Loonie' for the dollar
Canadian currency's strength boosts local businesses at the start of the holiday season
By John J. Hopkins Times
The first tell-tale sign is along busy town roads such as Walden Avenue and Union Road. Every day thousands of vehicles bearing Ontario license plates travel along these routes. At times, there are almost as many Ontario plates in store and mall parking lots as there are New York plates. And the people stepping out of these cars from the Canadian province are spending cash. Lots of it.
Canadians, especially those within a day's drive to the Buffalo area, are taking advantage of their strong dollar by spending their money here.
Boosted by the Canadian dollar, "Black Friday," the day after Thanksgiving and the traditional start to the holiday shopping season, was a boon to many local merchants. Some stores reported their best Black Friday ever.
A visit to Walden Galleria last Saturday found easily four out of every ten vehicles from Canada.Atypicaldayat the mall finds one in five shoppers is Canadian.
On Tuesday, three out of every ten cars displayed license plates from Canada, mostly from Ontario, but there were some Quebec plates scattered throughout the lots.
"It started several weeks before," said Russ Fulton, director of mar- keting for Walden Galleria. "We were running 30-40 percent Canadian."
Many Canadians are spending their weekends in town, providing a boost to local hotels.
The mall isn't the only destination for these travelers. Target and K-Mart department stores plus local shops are also reaping the benefits.
"We have seen a substantial increase of customers from Canada," said John Kavulich Jr., owner of Niagara Hobby & Craft Mart.
As of Monday afternoon, the Web site XE.com was reporting that the Canadian dollar was worth 1.2 cents more than the American dollar.
While the one-cent difference may not appear to be much, other factors make a visit to the Buffalo area attractive to Canadians.
With General and Provincial Sales Taxes, called GST and PST in Ontario, totaling about 16 percent, Canadians can save almost 10 percent in the United States.
In addition, store selection and merchandise selection is better in the Buffalo area. Many Walden Galleria stores aren't located in Canada.
"Our edge is that over 80 of our more than 200 stores are unique," Fulton said. "You can't find them at other shopping malls."
Kavulich said his store is shipping more merchandise to Canada this year which, because of its expense, the store is discouraging.
In-store customers are "amazed" at the variety, Kavulich added.
Fulton said many stores in the Galleria reported their best Black Friday sales since opening in the mall.
"We attribute a huge part of that to Canadians," Fulton said. "Our valet parking on Saturday and Sun- day were 80 percent Canadian cars. They're here; they're shopping."
Bus traffic is up 30 percent at the mall, Fulton added. He said there are up to 40 buses pulling into the mall parking lots every Saturday and Sunday. Eighty percent of the buses are from Canada.
Stores and malls aren't just relying on the strong dollar; they are encouraging Canadians to visit the Buffalo area.
Kavulich said he is aggressively increasing marketing to Canadian residents, targeting the "Golden Horseshoe" region between Fort Erie and Toronto.
Although Walden Galleria doesn't advertise in Canada- it relies on word-of-mouth- Fulton said there are incentives for bus tours. The driver and escort are each given a $20 gift card, and all passengers receive a canvas tote bag containing store coupons.
Some individual mall stores such as Lord & Taylor and Macy's offer a "travelers' coupon" in which customers receive up to 15 percent off their purchases.
Local hotels are reaping benefits as well.
According to Canada Border Services Agency, Canadians who spend less than 24 hours outside their country are subject to paying duty and taxes.
However, a Canadian who spends 48 hours in the United States may bring up to $400 in merchandise across the border without paying duty or taxes.
This, apparently, is what many Canadians are doing.
"All of the hotels in the airport area are doing very well thanks to our Canadian friends," said Russ Papia, director of sales at Millennium Hotel on Walden Avenue. "Weekends are pretty much selling out."
Papia said that the typical occupancy rate in December for Cheektowaga area hotels is in the low-tomid 70s. Already, the occupancy rates for December are in the upper 70s to low 80s.
Kavulich was glad to hear that Canadians are spending their weekends in the area, noting their visits translate into more customers in restaurants and other businesses.
Papia said the Millennium and many of its competitors sold out on Thanksgiving day, which is usually a "soft" period for area hotels. An influx of Canadian shoppers greatly contributed to the maximum capacities.
The shoppers are coming back for more, Papia added, making it difficult to determine if and when the rush for rooms has peaked.
"Everything about this year from the Canadian perspective is different," Papia added. "We continue to be surprised by how much demand there is. It's above and beyond what we anticipated."
Canadians who head back to the border without spending 48 hours in the United States face paying taxes and duty fees. Most try to get around that by wearing as many of the clothes they purchase as possible.
"They're getting a great price and they're wearing 10 layers to get over the border to avoid the GST," Fulton said with a laugh.
However, many customs officers at the border are aware of this ploy, and Canadian shoppers who return home with merchandise they can't wear usually wind up paying duty and taxes.
"The one consistent complaint that we do hear from customers from Canada," said Kavulich, "is they are lamenting the aggressiveness of Canadian customs officers upon their re-entry. They wish the officers would look the other way."
Still, Kavulich said that the Canadian customers are "money ahead" even after they pay duty and taxes.
Those who wear their new clothes back to Ontario usually shed their old clothing in mall and store rest rooms, or simply dump them in parking lots, leaving a mess.
Walden Galleria has turned this problem into a theme that parallels the season: giving.
"We've teamed up with Goodwill of Western New York and have placed collection bins at the doors," Fulton said. "They're leaving what they don't want in the bins."
Fulton said Goodwill representatives are constantly clearing out bins full of discarded clothing and shoes.
Despite the influx of Canadians, Fulton said that the mall's "bread and butter" remains those who live closest to the Galleria: residents of Cheektowaga, Depew, Sloan, Amherst, Buffalo, and Lancaster.
"They're who're here every day," Fulton said.
Kavulich noted there is another benefit to the area from the strong "Loonie:" an increase in sales tax revenue for Erie County.
"The more sales tax revenue collected, perhaps County Executiveelect Chris Collins and the Legislature will do what they promised, and that is to reduce the sales tax," Kavulich, "instead of just seeing the additional sales tax as more revenue to spend."
Kavulich noted that a lower county sales tax will generate greater revenue because it will encourage spending by county residents and visitors alike.
Noting that the strong Canadian dollar could fall, Fulton said Walden Galleria is working on its marketing plan for next year.
"The double-digit numbers won't last forever," Fulton observed. "We have to be ready if their dollar falls off."
While traffic generally increases at this time of the year, the additional vehicles on the roads have not caused too many problems for Cheektowaga police, said Captain John Glascott, who noted that the roads in the retail districts of town are always busy during the holiday season.
However, there have been reported incidents of road rage, including one "Black Friday" incident in which a man allegedly slashed the tires on a woman's vehicle after he got into a dispute with her over a parking space at Walden Galleria.
Statistics compiled by Cheektowaga indicate there were 50 calls in the midtown district on Black Friday, which was slightly more than in 2006.
Among the reports were several shoplifting and criminal mischief incidents in and around the mall. There were also many motor vehicle accidents and parking violations.
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