Black Friday and the Americanization of Canadian shopping

At one time in Canada, Black Friday would have more likely meant a really rough day on the stock market.

This year, though, the U.S. "Black Friday" shopping phenomenon is making its presence felt here like never before.

Retailers are dropping prices on everything from toys to TVs — at least two big American chains here (Wal-Mart and Sears)  are pushing Black Friday prices — echoing the deep discount push that traditionally sweeps through the U.S. for the day after American Thanksgiving.

Perhaps the Black Friday promotion shouldn't be that surprising in Canada, where shoppers have watched American retailers from Wal-Mart to J. Crew steadily march across the border and set up shop.

"Increasingly our retail is more Americanized and Canadians have always shopped in a very similar fashion to the Americans," says retail expert Brent Houlden of Deloitte Canada.

In fact, more than half of all retail sales in Canada are now made through American-owned retailers.

With Black Friday, Houlden says, "I think you're just seeing yet another Americanization, which is fine because they're top-notch merchants just like our guys."

Well branded

Retail analysts like Houlden and John Winter, of John Winter Associates in Toronto, say that focusing on Black Friday is an understandable move for retailers here.

"It's a no-brainer," says Winter. "You don't have to explain to a Canadian what a Black Friday sale is because it's been so popular in the U.S. for at least a decade."

So popular, in fact, that shoppers have been known to swarm stores and pitch tents to wait in line overnight, something that hasn’t happened widely in Canada — yet.

Houlden says the Black Friday low-price promotions make sense for retailers looking for those extra-margin dollars.

He says those retailers are "buying your business. They're discounting. They're giving heavy promotions to get you in the door. But it's good for both parties."

In the U.S., Black Friday is a closely watched phenomenon for economic and political reasons. It has become the unofficial — but consistent — beginning of the holiday shopping season and a sign of how optimistic consumers are feeling about the economy.

In Canada, there hasn't been that traditional start-date."We're still dependent on the weather, so if we get a big snowstorm, everyone goes: 'Oh, time to start thinking about the holiday season,' " says Houlden.

"From a retail, consumer point of view, there are a lot of good buys out there [on Black Friday], and it really is the signal of the season. It's powerful. No wonder the Canadian retailers are adopting it."

As well, says Winter, there's something inherent in the psyche of shoppers that makes such a signal a good thing for retailers.

"The problem with consumers is that they're procrastinators. They put off the purchase until the last minute. Anything to get them going early is good for the retailer."

High awareness

While Wal-Mart Canada has had sales geared to the American Thanksgiving weekend before, this year marks the first time the major retailer is promoting "Black Friday" prices.

"We have had 'events' on the American Thanksgiving weekend for the past two years," public relations manager Rosalyn Carneiro said in an email. "This year we decided to call the event Black Friday because our customer research shows that there is a high level of awareness around this term in Canada."

Carneiro says Wal-Mart wants to help customers prepare for the holiday season by offering top brand-name items at "remarkable" prices.

"We also want to give Canadians a good reason not to cross the border for good deals."

Sears Canada is promoting its "Black Friday Weekend Sale," which touts among other things a 51-inch Samsung  plasma TV for $479.99 (regular price $719.99).

Canada has become an attractive place for American retailers, Wal-Mart included. The popular retailer Target is due to arrive in 2013.

"Most retailers are more profitable in Canada than in the States, or at least equally profitable," says Houlden. "That's always a hard thing to explain to the American retailers [because] our rent is actually more expensive than they're used to, and our employees are more expensive than they're used to. But there's less competition in Canada."

Profit is one factor that could play into the higher prices that Canadian consumers see on some products, compared to the same goods on U.S. store shelves. A Senate committee in Ottawa is looking into the Canada-U.S. gap in prices, and Winter says prices should be the same because we are in a common market. 

'Very different citizens'

For his part, Houlden sees some "legitimate differences" in prices because of such costs as freight rates and duties. But he notes that some of the big retailers have been working to reconcile the price differences and force vendors to get down to more similar prices here.

While Black Friday could be a sign of further Americanization of Canadian retailing, Houlden doesn't equate it with any potential loss of Canadian identity.

"I think we're actually very different citizens, if you ask me, and I think that's the important part. Most of the goods are made offshore. We're all buying the same BlackBerry, iPhone, whatever and that's just because of the way the world works now," he says.

"I think we can still have our own unique identities. But the goods are uniform and it makes sense that the distribution channel eventually becomes more uniform, too."

At the same time as American retailers push further north, Houlden sees potential for Canadian retailers to push south.

"I think Canadian retailers are doing pretty well," he says, noting businesses such as clothing retailer Lululemon Athletica.

"It would be great if our retailers kept pushing south and prospering. That's what's important. Because if they don't, then they're really not world class. But at this stage, I think they're getting pretty world class."