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Surging Canadian dollar sending shoppers south

The Canadians are coming -- armed with high-powered loonies and targeting Buffalo-area shopping malls.

By the carload and busload, Canadians are bringing their supercharged dollars -- currently worth $1.06 in the United States -- across the border in what is nothing short of a shopping frenzy.

*About 40 buses, carrying more than 1,000 Southern Ontario residents, were scheduled to stop at the Walden Galleria on Saturday and Sunday.

*Fashion Outlets of Niagara Falls expects that 65 percent of its shoppers this weekend will be Canadian.

*And Canadian Border Services, which processed an estimated 10,000 shoppers at local international bridges last weekend, has issued special alerts listing the "do's and don'ts" of cross-border buying, hoping to expedite their re-entry to Canada.

"We've got quite the frenzy going on. I'm having a hard time finding enough buses to meet the demand," said Margaret Whittet, whose bus tour company operating out of Cambridge, Ont., has been offering shopping excursions to Buffalo and beyond for 18 years.

"They want to shop until they drop," said Whittet, who filled three buses to the Galleria on Saturday, and sold out midweek, three-day trips hitting malls in Pennsylvania and Michigan.

>20 percent savings

Grace Hepburn and her three teenage daughters arrived at the Galleria shortly after the stores opened Saturday.

"They brought all their baby-sitting money," said Hepburn, whose family lives in a Toronto suburb. "They know they're probably going to save at least 20 percent."

Liz and Peter Jauch of Waterloo, Ont., jumped off a Canadian charter bus and headed for Macy's. Later in the day, they planned on making stops at an outlet mall and at a local Tops to make food purchases.

"Your turkeys are cheaper over here," Liz Jauch said.

Ontario residents always have had an appetite for U.S. malls and the broader retailer mix, but the strong Canadian dollar has made them ravenous.

"It has just exploded as the value of the loonie has gone up," said Fashion Outlets spokeswoman Julie Clark. "We've never seen anything like this."

She predicted Canadians will compose 65 percent of that mall's customer base over this dual Veterans/Remembrance Day weekend. At the Galleria, the Buffalo area's largest mall, Canadian accents are filling the corridors as well.

"There's a significant increase; on weekends 35 to 40 percent of our shoppers are coming from Canada," general manager James L. Soos said.

While the Galleria doesn't have an exact count of Canadian shoppers, Soos and his staff rely on counts of Ontario license plates, tour buses, and retailer estimates of those who give "postal codes," instead of ZIP codes when making purchases.

And there's also the telltale heaps of shopping bags, shoe boxes and purchase evidence stuffed into mall garbage receptacles and dumped in parking lots by cross-border buyers attempting to avoid Canadian taxes and duties on their trip back home.

Statistics Canada, which offers hard numbers on cross-border shopping trips, counted a 4.2 percent climb in such U.S. visits in August, the most recent month for which a tally is available. The Canadian dollar didn't hit parity until September.

The value of the already-strong Canadian dollar soared by more than 15 cents against the greenback since the end of August, setting the stage for a string of new cross-border shopping volume records. The loonie hit an all-time high of $1.10 compared with the U.S. dollar on Wednesday, before dropping back a few cents by week's end.

"We've only seen the numbers build," Boulevard Mall manager Joe Wahl said. "With the economy in the U.S. feeling a little soft, the Canadians are making up for what our regular shoppers aren't buying."

>More choices in U.S.

On its face, the current Canadian advantage of less than 10 cents on the dollar might not seem like enough incentive to pile into a car, or book a bus tour, and make a 100- to 200-mile round trip that involves the hassles of crossing the border. But there are several economic factors that make the shopping grass greener for Canadians in the U.S., led by broader choices of retailers, and lower prices in many categories of goods.

Electronics, apparel and shoes are prime categories where Canadians can save by shopping in the states, even after tacking on 14 percent federal and provincial duties upon re-entering their country.

Canadian shoppers also home in on stores and labels not found in their country.

As Heather Sayle of Brantford, Ont., walked off a Canadian charter bus and headed for Macy's in the Galleria, she said this was only the second time she's made such a shopping pilgrimage in the last 20 years.

"I'm here for fashion things like Ann Taylor," she said. "There are some things you just can't find [in Canada]."

Other shoppers from across the border cited Bath & Body Works, J.C. Penney and Macy's as three retail pit stops they enjoy making when they come to the states.

Victoria's Secret, a popular U.S. intimate apparel seller that doesn't have stores in Canada, is also a favorite cross-border shopping stop. An employee at the chain's just-opened store in the Galleria estimated 85 percent of buyers on Saturday hailed from the cold north.

>Retailers fight back

In recent weeks, Canadian retailers have been fighting back by lowering prices and boosting advertising efforts. Sears Canada and Wal-Mart are among the major retailers citing bottom-line pressures from the leap in cross-border shopping.

Vicki Mackenzie, who lives west of Kitchener, acknowledged her cross-border buying binge has some downsides.

"At the border crossings, inspectors sometimes give us a hard time," she said. "They ask us why we're not buying Canadian."

It's an issue that resonates with 16-year-old Alex Hepburn, who lives north of Toronto. She said she likes getting deals every once in a while by spending her baby-sitting earnings in U.S. stores.

"But I also think about Canada's economy. I still like to support stores at home," she said.

And then there's the trip back across the border. Shoppers traveling via bus are automatically routed into the Canada Border Services facilities upon their re-entry, facing a clearance process that takes anywhere from 30 to 90 minutes when international traffic is light, and several hours on weekends and holidays.

Last Sunday, 161 tour buses carrying shoppers, Buffalo Bills fans and other travelers, led to waits of five hours and longer for bus travelers returning to Canada via the Peace Bridge.

"It was an extraordinary situation," said Border Services spokeswoman Jean D'Amelio Swyer. "We only have room to process one busload at a time, and we had dozens of buses arriving at a time for several hours.

"We are doing everything we can to expedite these travelers, but we still have to balance clearance with safety and security," Swyer said.

e-mail: slinstedt@buffnews.com and bmeyer@buffnews.com.

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