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af THE’ FREQUENCY of cross-border shopping trips — and the

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amount Canadians spend when they go to the United States (U.S.) —

“has! more than. doubled since 1987, according to a study released this

: month.
: “We estimate that $4. 8 billion worth

_of retail. sales ‘leaked across. the U.S..
“border in 1991,’” said David Walker, the

Royal .Bank’s, economist specializing in

_ North American economic conditions. .

‘The study was conducted by the Royal
Bank of Canada.

‘| “This represented more than 3% of all”
non-automotive retail spending last year,

‘-and ‘the proportion of lost. sales is even
greater for retailers close to the border.””
‘The primary causes of the rapid in-
crease in cross-border shopping since
1987. are the rise in the Canadian dollar,

“ Jower U.S. prices, ‘greater product selec-

tion, better customer service, Sunday
shopping and the impact of the recession,
according to a report on the study.

The Goods and Services Tax (GST) has
been unfairly blamed as a major incen-
tive for shoppers to go south, he said.

While the GST has had a significant
impact on clothing retailers, its overall
effect on cross-border shopping has been
relatively slight. .
- As Canadian retailers strive to improve
their distribution, competitiveness, ser-
vice, and selection —. as well as pro-

moting their product. and warranty
standards -— -the trend may start to
reverse itself, the report said.

Canadian-made products tend to be
superior in both their quality-and in. the
warranties available for them, the bank’s
economists added.

The most successful retailers are build- . §

ing economies of scale through alliances
and mergers .and* are. adopting
sophisticated marketing techniques, in-
cluding the use of popular warehouse

outlets. The decline of the Canadian.

dollaz and the efforts of Canadian

retailers and governments may be slowing |

the tide of southbound sheppers.

During the first quarter of 1992 the
number of same-day car trips to the U.S.
was 5% higher than the same period in
1991, but that is the smallest percentage
increase posted during the last five years.

On a month-to-month basis, the
number of same-day auto trips has
begun to decline with April showing the
fourth consecutive .monthly decrease.
Crass-border visitors making short
trips was down 1.8% from March.

SE ET PT ae 2 TE
See Centrefold for Canada Day Activities

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