Canadian Retailers Cross Their Fingers

With the loonie up, the dollar down, and Canada recovering from their recession, Canadian retailers are getting nervous.  The Canadian economy is in recovery mode right now, they have to be very careful because the economy is very fragile while it’s being built back up.  The quickly accelerating rate of the loonie is not necessarily the best thing for their economy right now, and is actually posing a serious risk.  With about one third of the country’s economy being in exports, there is no competition as the loonie rises.  Retailers have been looking forward to the holiday season in hopes that shoppers would help them back on their feet.  But with the rising value of the loonie and with Canadians still being extremely careful with their money, many fear that shoppers will go south to do their damage.  Canadians are more careful with their money than ever, bargain stores like Wal-Mart and Zellers are the ones thriving right now.  With all of the U.S.’ retail blowout sales, Canadian retailers may be forced to lower their prices even though they really can’t afford it.  They are, sort of, in a lose lose situation.  They can lower their prices in order to keep shoppers and have a short term  solution, but it will not help them at all in the long run.  Or they can keep their prices as they are, and risk losing customers.