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Retail Traffic

Run for the Border

Parking lots at shopping centers near the United States's northern border are suddenly jammed with vehicles with Canadian license plates as cross-border shoppers rush to take advantage of the strengthening Canadian dollar.

This has created an unusual situation for both retailers and managers. Suddenly, currency exchange booths at these properties routinely draw long lines and store clerks struggle to decipher credit cards carrying logos of unfamiliar Canadian financial institutions and banks.

All this is a stark break from historic behavior whereby U.S. shoppers were the ones crossing the border looking for deals in Canada. That relationship has slowly been turning for the past few years as the U.S. dollar has steadily weakened. But it all came to a head in September when, for the first time in more than 30 years, the Canadian dollar reached parity with the U.S. dollar.

“The exchange rate is getting more people into the stores,” says Josette Di Domizio, marketing director for the Summit, a 720,000-square-foot center owned by Raleigh, N.C.-based Anthony & Co./Oncor International, located five miles south of the Canadian border in Niagara Falls, N.Y. Since September 20, the lines at the mall's currency exchange service have doubled, she says.

Fashion Outlets of Niagara Falls, N.Y., general manager Mary Whelan too says she's seen an increase in Canadian traffic. “The license plates in the parking lot tell the story,” she says.

The 530,000-square-foot outlet shopping center owned by the Coral Gables, Fla.-based Talisman Company LLC is located nine miles south of the Canadian border and has long counted Canadians among its customers. Whelan attests the number of Canadians has been steadily increasing over the past six months. Now, she estimates, as much as 70 percent of the center's sales can be attributed to Canadians.

To take advantage of the bolstered interest from Canadians, the center is now offering multiple daily shuttles between the mall and six hotels in Ontario. A round-trip ticket for its Shoppers Shuttle costs $15. Passengers are required to have a valid passport or photo identification to clear the U.S. border.

But while U.S. centers may be exalted with how things have worked out, a different picture emerges in Canada where centers that for years have relied on American shoppers coming north to bargain-hunt have suffered.

For example, traffic at Toronto-based RioCan REIT's 500,000-square-foot Niagara Square Shopping Center in Ontario has dropped precipitously in recent months, according to marketing director Tammy Robertson. “We've definitely been negatively affected,” she says.

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