Major Canadian retailers looking for strong year
By Michael J. Knell -- Furniture Today, April 14, 2002
HIGH POINT — There won't be huge crowds of Canadian retailers at market this week, although business north of the border mostly has been holding up since the beginning of the year.
While one will bump into buyers and senior executives from most of Canada's top 25 furniture retailers and the larger independents, the overwhelming majority of Canadian retailers won't be here.
That's not unusual, but more smaller stores may be skipping this market.
The reasons they give are varied, but two are common: the cost of attendance and the fact they have no compelling need to go.
With the Canadian dollar hovering around 62 U.S. cents, coupled with the dearth of direct flights to the High Point regional airport and the rates charged for hotel rooms during market, many retailers in this country say the cost of attending market far outweighs the benefits of being there.
Some also said that, as a cost-cutting measure, they'll skip April and attend October.
The no-real-need-to-go reason perhaps was put best by a Toronto-area retailer who said, "The best of High Point comes to us anyway."
Canadian retailers remain confident that while 2002 won't be a record-breaking year, it should be one of moderate growth.
"All of the economic factors are right for us, so while we're not going to set any records, we believe it will be a strong year," said Wayne Strachan, executive vice president of The Brick, the high-impact promoter based in Edmonton, Alberta.
"What is noticeable is that nothing is predictable," said Dan Weare, national business manager/furniture for Sears Canada, this country's largest and only truly national furniture retailer. "Business is spotty for a couple of weeks and then you have a couple of good weeks."
"Business has been good, although March was a little soft," reported Bob Shelton, upholstery merchandise manager for Mega Group, the cooperatively owned buying group based in Saskatoon, Saskatchewan.
Retailers note that housing starts, housing resales and interest rates remain favorable, while the employment picture continues to improve.
The one dark cloud on the horizon is the automotive industry, which continues to promote 0% financing to the Canadian consumer and is now stretching the terms to as long as three years. Stores fear this may soak up furniture buying dollars.
"So much of this industry comes out of the housing market, and this has been such a phenomenal year for real estate, so we're looking for a fairly strong second half," Weare said.
There aren't any hot-button categories for Canadian retailers this market, although those surveyed said leather upholstery and bedroom are two areas most in need of freshening on their floors. And because many buyers don't travel to the Pacific Rim on a regular basis, High Point also has become their shopping mall for goods from China, Indonesia and other points in Asia.
"Leather is still strong, so we're always looking for that," The Brick's Strachan said. "And I'm pleased by how much new stuff is coming from overseas. You can see of lot of that in High Point."
For many retailers, their appliance departments will prime the growth pump, since white goods normally are the first big-ticket purchase after moving day.
"The first thing people do is buy appliances. They tend to postpone furniture purchases until a little later," Weare says.
In the latest edition of Furniture Economics, Stefan Wille, president of Aktrin Furniture Information Center, said Canadian consumer spending on furniture may be restrained by the fact that real disposable income — after taxes and adjustments for inflation — is still in decline, although consumer spending in 2001 stayed the onset of recession in this country.
"The durable goods consumer sector, which includes furniture, is much more volatile," Wille wrote. "Growth averaged 6.4% in 2000 and 4.2 % in 2001. However, growth plunged into the negative territory (-4.6%) during the third quarter. This created catch-up demand in the fourth quarter, catapulting growth back up again by an astounding 25.4% during the last quarter (expressed at annual rates)."
Consumer spending on furniture grew 6.2% in 2001, Aktrin said.
Wille is forecasting that consumer spending will increase 5.7% this year, and 4.6% in 2003.
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