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Canadian, U.S. retailers take a hit on crucial shopping weekend

Shoppers examine merchandise in The Bay at Hillcrest Mall in Richmond Hill, Ont., on Dec. 21, 2013.

Matthew Sherwood/The Globe and Mail

A business group says the nasty winter ice storm that walloped parts of Ontario through to Atlantic Canada has also hit retail stores hard during a prime shopping season.

The Retail Council of Canada says the weekend storm arrived at a make-or-break time for many stores' profits, with $30 to $40 billion in sales rung up during December.

In the U.S., however, despite a winter storm that hit major Midwestern markets such as Chicago and Detroit, no event was severe enough to disrupt holiday shopping in any part of the country, said Evan Gold, a senior vice-president at Planalytics, a weather consulting firm in Berwyn, Penn.

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Still, American retailers reported reduced shopping on the final weekend before Christmas, despite the deep discounts necessitated by an increasingly competitive retail environment. U.S. shoppers also showed signs they will do more of their spending after Dec. 25 than they did in the same period last year, in hopes of snagging even more deals.

Analysts have said this is turning out to be the most competitive holiday season since the recession, forcing retailers to ramp up promotions. The season generates 30 per cent of sales and 40 per cent of profits for many stores.

After a strong start to the holiday shopping season, sales at U.S. stores fell for the third consecutive week as Americans continue to hold back on spending during what is traditionally the busiest buying period of the year.

In Canada, the Retail Council says the weekend storm arrived at a make-or-break time for many stores' profits, with $30- to $40-billion in sales rung up during December. It says the final tally of business lost to the weather system that toppled trees, interrupted transit and downed power lines could be high, and have a huge impact on small- and medium-sized retailers.

The group says stores are trying to be flexible by extending hours and is asking shoppers to check if their local merchants are staying open later. Some malls, however, have faced power shortages themselves.

Target Corp., which is also is also dealing with the after-effects of a massive data breach in the U.S., said some of its stores in Ontario and Atlantic Canada would remain open until midnight Monday.

Hackers stole data from up to 40 million credit and debit cards of shoppers who visited Target stores during the first three weeks of the holiday season. The company suffered from a 5-per-cent reduction in customer traffic over the weekend in the wake of the cyber-incursion, retail consultancy Customer Growth Partners LLC said.

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Analytics firm RetailNext estimated that U.S. retail sales fell at stores over the weekend, compared with the same days last year. That does not include online sales, which have been strong. The number of visits to stores fell 4 per cent, RetailNext said.

For the week that ended on Sunday compared with the same week last year, sales at U.S. stores dropped 3.1 per cent to $42.7-billion (U.S.), according to ShopperTrak, which tracks data at 40,000 locations. That follows a decline of 2.9 per cent and 0.8 per cent during the first and second weeks of the month, respectively.

– With files from The Canadian Press and Reuters

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About the Author
B.C. reporter

Ian Bailey is a Vancouver-based reporter for The Globe and Mail.  He covers politics and general news. Prior to arriving at The Globe and Mail, he reported from Toronto and St. John’s for The Canadian Press.  He has also covered British Columbia for CP, The National Post and The Province. More

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