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Holiday spending expected to increase by 3.9%

NEWS HIGHLIGHT

Holiday spending expected to increase by 3.9%
Canadian retailers should
brace themselves for a challenging holiday season, as consumers are
expected to be more wary with spending while they pledge to pay down
historically high debt levels.

Oct. 13, 2011 – Canadian retailers should
brace themselves for a challenging holiday season, as consumers are
expected to be more wary with spending while they pledge to pay down
historically high debt levels. According to Colliers International's 2011 Fall Retail Forecast, December's retail sales are expected to reach
$32.7 billion, a moderate 3.9 per cent increase compared to last year's
$31.5 billion spent by Canadian households.

On an annual basis, Colliers' forecast, which is generated using a
trend-based model comparing recent activity with historical patterns,
pictures an even gloomier prediction. Total retail sales for 2011 is expected to slightly surpass $297 billion, a
marginal one per cent year-over-year increase from $294.3 billion.

"With inflation taken into account, Canadian retailers are actually
expected to see a slight drop in annual sales compared to the previous
year according to our forecast," says Drew Keddy, Vice President of
Canada and National Retail Leader with Colliers International. "Fears
of another global recession and a strong loonie are only two of the
reasons shoppers are more cautious about their spending and conscious
about where they spend their dollars, often looking for bargains south
of the border."

But while the national forecast suggests a challenging 2011 for Canadian
retailers, on a regional breakdown, not all provinces are expected to
perform the same. Spurred by strong local economic growth, Saskatchewan, PEI and Alberta (Alberta due to renewed activity in its oil sands) are expected to lead
the pack in December with sales growth rates of 7.6 per cent, 4.9 per
cent and 4.6 per cent respectively ($1 billion, $128 million and $4.3
billion).

At the other end of the spectrum, Nova Scotia, British Columbia and Quebec are expected to see a nominal drop in year-over-year consumer spending
and a soft holiday season.

James Smerdon, Director, Retail and Strategic Planning with Colliers
International in Canada, adds, "Canadian retailers are being challenged
like never before as they have to deal both with a decline in shoppers'
appetite as well as with the looming invasion of large-scale and
powerful U.S.-based retail chains. There is no doubt that the next 12
to 24 months are going to be critical to the survival of some Canadian
brands."