Sluggish economy lowering holiday sales
Tuesday, Dec 22, 2015 06:00 am
Plummeting sales continue to plague Bonnyville businesses, even with Christmas around the corner, as the steady stream of holiday shoppers has been drastically reduced by a slower economy.
“I think the mood is just not what it used to be in previous years, maybe it’s the lack of snow, the lack of cold, but it doesn’t seem like anybody is in the Christmas spirit this year,” said Sal Naim, local business owner.
As the town’s large transient working population packs up and leaves and the permanent population faces layoffs in the oil patch and bleaker job prospects, businesses owners are noticing more and more residents are understandably spending less.
“People are very cautious with their money, they’re hanging onto it, they’re looking for their best bargain, there’s a lot of uncertainty out there,” said Michael Kruesel, co-owner of A-OK Shoes & Key Men’s Apparel. “People are very nervous to spend, especially on high ticket items.”
For Kruesel, spotty traffic, milder winter and less snow on the ground has reduced sales by around 20 per cent in December alone. Items like mukluks and winter boots, which usually sell out this time of year, are still sitting on the shelves.
“I already started to adjust over a year ago because you do your buying six months prior to the season and I already saw less traffic coming through a year ago in July, like things starting to slow down, and in the oil patch some of the big projects were starting to wind down, so I anticipated a bit of a slow down.”
As the price of oil continues to fall, a weaker Canadian dollar is giving no respite to business owners who import inventory from the United States.
“If our dollar keeps shrinking, the prices will keep going up,” Kruesel explained, noting that when the Canadian dollar was trading at 60 cents to the U.S. dollar some years ago, companies south of the border increased prices and refused to ship items if Canadian businesses didn’t oblige.
Naim’s sales are also down between 20 and 30 per cent, year over year. Like Kruesel, he has noticed that the people are only spending on the necessities, but he also has a new competitor in town, Boston Pizza, which has changed the dynamics of his season.
“Usually it starts to pick up a few weeks prior to Christmas, this year it seems like it’s taken a little longer to start than previous years for sure, so we’re thinking it’s going to be a short, fast season for us in retail,” Naim said of liquor sales at Sonny’s Liquor Store.
As the retailers reel from the effects of a slower economy, consignment and second hand stores are witnessing steady holiday traffic. The Dove Centre operated Bargain Boutique is one such store that has seen sales increase.
“We’re doing pretty good; earlier this year we had started an online auction and we find that that allows us to probably get a little bit more for items than we would really get for them in store,” said Darren Finlay, manager of Bargain Boutique. “That’s really helped supplement sales.”
He added, “We’ve noticed we’ve increased the amount for sales that we have and right now we’re running a promotion where you can pick your own discount for up to 25 per cent and that keeps people coming in.”
Heading into the new year, business owners like Kruesel are preparing for a long year ahead, with some projections saying it could take well over a year for the economy to bounce back.
“It’s going to be scary out there for the next year and we’ll see what happens.”