Vancouver's rising dollar means fewer bargains for visitors

VANCOUVER, B.C. -- While Canadians observed their Thanksgiving Day more than a month ago, some hope the American version gives them reason to celebrate.

Svetlana Fouks will play host to a special exhibit at her art gallery this weekend, specifically to draw visiting Americans. And across town, shop owner Cathy LePore plans for long weekends by staffing additional employees at her denim store.

"We are very aware on Robson Street, if it's a U.S. holiday, we're going to be a little bit busier," LePore said.


		Karen Ducey / P-I
	Robson Street, a major business district, routinely experiences a large number of American shoppers.

But with the Canadian dollar reaching a decade-high earlier this month, the U.S. dollar is buying less than it once did on the other side of the border. Earlier this week, the American dollar was worth about $1.31 in Canadian currency. The same time last year, it was worth about $1.58.

Americans traveling north are discovering that shopping in Canada is not the bargain it once was. Meanwhile, Canadians, whose dollar is now worth about 76 cents in the states, are finding that U.S. prices are more affordable.

On a recent gray afternoon, Julie Rackley and Margie Gerrity strolled down Robson Street with other members of their Bellevue book club, which had taken a weekend trip to the city.

They planned to hit a few shops -- such as Shifeon, a specialty cosmetics store -- eat dinner at CinCin and possibly take in a movie. While picking up some holidays presents and a few gifts for themselves, the women noted that the exchange rate wasn't quite as good as it used to be.

"I may not spend as much," said Rackley, who carried a bag from Murchie's, a tea shop based in British Columbia.

"Before, I always felt compelled," Gerrity added. "If I were here, (I would) have to take advantage of it."

The decline has Canadian retailers keeping an eye on the exchange rate. Vancouver, Canada's third-largest metropolis, located about 140 miles north of Seattle, is closer to the city than Portland and in many ways economically linked. From January to August, the greater Vancouver area played host to more overnight visitors from Washington than from any other state except California, according to statistics from Tourism Vancouver.

Overnight visitors from all areas spent a total of $3.6 billion in Vancouver last year. They spent more of that money on retail (19 percent) than on recreation and entertainment (9 percent).

Businesses throughout the city go out of their way to court Washington shoppers. Tourism Vancouver runs focus groups in Seattle. Hotels offer special discount packages, which include coupons and gift certificates to local shops. Retailers post signs displaying the latest U.S. exchange rate. And, although most stores have abandoned the practice, a few used to quote prices in U.S. dollars on sales tags.

Many American shoppers are hitting Robson Street -- a bustling downtown strip that is home to a mix of American, Canadian and European retailers, a number of which are not found in the States.


		Karen Ducey / P-I
	Lana Wool explains a bath bomb to Paola Nahssen, a student from Brazil, at the popular Lush cosmetics store in Vancouver, B.C., the chain's busiest.

The Lush cosmetics store there, where shoppers can buy banana-scented soap, is the British company's busiest in Canada; Seattle residents generate about 40 percent of its sales, estimated manager Dawn Jackson. Across the street, Spanish apparel retailer Zara sells knockoffs of Gucci- and Prada-style clothing.

"The biggest portion of our customers on weekend come in from Seattle," assistant manager Tina Guindon said. "They come in big groups. It'll be like every second customer is from Seattle."

But now that prices are a bit higher for Americans, a few have canceled orders from Vancouver Cigar Co. Some of the more expensive merchandise at Blue Ruby Jewellry is taking longer to sell. Just earlier this month, a sales clerk at skin-care store H2O Plus scraped off stickers quoting prices in American dollars.

The drop in value of the American dollar up north coincides with the beginning of the holiday shopping season, the busiest time of the year for retailers. A number of factors have affected consumer spending and tourism this year, including the U.S. economy, war in Iraq and tightened security and airports and border crossings. But the exchange rate could have another effect.

And although Vancouver retailers say they haven't noticed a dramatic decrease in American spending yet, they are watching consumers' shopping habits.

"If our dollar continues to strengthen over a series of quarters, we'll likely see a change of behavior on both sides," said Mark Startup, president and chief executive of industry association Retail BC.

With the Canadian dollar worth more -- this week nearly 13 cents more than a year ago -- Washington businesses are encouraging Canadians to come south for the winter.

Some Spokane hotels, for instance, are accepting the Canadian dollar at par.

And the Seattle Convention and Visitors Bureau is spending about 10 percent to 15 percent more on advertising in Canada this year. It also is working with Horizon Air to promote its "Super Saver" program, which offers hotel deals and merchant coupons, in the airline's new service area of Kamloops, B.C.

"We're spending traditionally a little bit more in radio and print with the anticipation that we feel we can increase the market share out there," said Don Welsh, senior vice president of sales and marketing for the bureau. "Clearly, as the exchange rate gets better for them, it makes more sense for them to come down on short-term notice."

Unlike the mid- to late 1990s, when it was "pointless" to go below the border, some Canadians such as Stephanie Clarke, executive director of the Yaletown Business Improvement Association in Vancouver, are thinking of coming back. Clarke said she and her friends might visit Washington to buy some business clothes.

Some already are back. Bellis Fair mall in Bellingham, one of the closest shopping centers to the border, has seen more Canadian shoppers since late spring, when the Canadian dollar's value was on the rise.

Although the exchange rate could bring more business to Seattle retailers, it also could help those who are trying to keep local consumers -- and their dollars -- from crossing the border into Vancouver.

Miguel Vigil opened a downtown Seattle women's clothing boutique called Maneater earlier this month. The shop features New York-, London- and Japanese-style street ware -- the type of clothing found in more fashion-conscious Vancouver.

"Our target market is people who go to Canada," he said. "I know a lot of people from Hong Kong here that only go to Vancouver to get their hair done and shop."

But for some, the allure of Vancouver is worth the price, no matter the exchange rate.

Josh Storm and Julie Wise drove to Vancouver from Tacoma earlier this month to celebrate Wise's 24th birthday, which they planned to spend "just shopping, drinking and eating," she said.

During their time there, they spent around $60 a night Canadian for their hotel room and bought some bath products at Lush. Although Storm noted that he preferred it when the exchange rate was around $1.57, he said the extra cost wouldn't prevent them from having a good time.

"Even if it was a dollar on the dollar, I'd still be up here."

EXCHANGING MONEY

Americans shopping in Canada can typically receive the best exchange rate by paying for purchases with credit cards. And as retailers there point out, even with an exchange rate that doesn't benefit U.S. shoppers as it once did, buyers can save more money by requesting a refund on the 7 percent sales tax that the government assesses on goods and services; consumers must spend at least $200 before taxes to be eligible.

P-I reporter Christine Frey can be reached at 206-448-8142 or christinefrey@seattlepi.com

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