Insights West recently investigated the attitudes and behaviours of Lower Mainland residents when it comes to cross-border shopping trips by car to the US. Our online study, conducted January 30 – February 3, 2013, included 1,077 adults living in Metro Vancouver and the Fraser Valley. What we found sheds light on interesting perspectives consumers have when it comes to their role in the local economy.
Yes, Most of Us Are Cross-Border Shoppers
As we expected, we found that many Metro Vancouver/ Fraser Valley residents are cross-border shoppers (74% have made the drive this past year; about half made three or more trips and a sizeable minority (15%) an incredible 13 or more times!)
[Click here to view all the data slides for this article]
There is also evidence that these cross-border shopping trips are becoming more common as the one-in-five (21%) are driving more often now compared to just 12% who are driving less.
Once in the US, spending crosses many categories, including the expected (about 9 in 10 buy each of gas, groceries and clothing/ shoes/ accessories), as well as commonplace dining out (93%), accommodation (85%), and entertainment (75%). Fewer travel to buy computers/ electronics (60%), and furniture (22%). A healthy minority (41%) also indulge in casino gambling. Covered in more detail in our recent press release, the data depicts diverse trip styles and shopping “missions”.
Are Shoppers Putting Pocketbooks Before Patriotism?
It seems fairly self-evident – and most economists would likely agree – that these cross-border shopping habits harm the BC economy, taking spending away from Canadian retailers, restaurants, bars, casinos and other local businesses, and ultimately costing Canadians jobs. And while most of our respondents agree with this basic premise, interpreting the findings uncovers the reasons why shoppers nonetheless continue to make the trip.
Largely, it seems that Metro Vancouver and Fraser Valley consumers see a big personal benefit (lower prices) that outweighs a smaller, shared, economic cost for their actions. The data suggests they feel that by staying home and paying a higher price for the same goods, they shoulder an unfair personal burden. And perhaps they justify this stance by taking a macro-economic view, questioning why they should pay a higher price in Canada to a multinational corporation, for a product that (often) is made overseas.
This hypothesis can be supported by the following findings from our study:
- Among those making these trips, the single most important reason is cost: “Prices for the same or similar products are lower in the US.” From a list of 13, this motivation was foremost, rated important by 85%, very important by 61%.
- Along the same vein of thinking, the second-most common motivator is the strong Canadian dollar (important to 84%, very important to 49%). Shoppers may emphasize this reason simply because their Canadian dollars go further in the US than they did a decade ago. But it also points to another rationale: when the Canadian dollar was weaker, global chains could make a claim for higher prices here versus the US; now with the dollar at parity, it appears more and more Canadians don’t see why they should continue to pay the difference, which brings us to the next point.
- As a corollary, there is virtually universal agreement (91% agree, 60% strongly) that “Canadian retailers need to improve their pricing if they want to prevent shoppers going to the US.”
- In contrast, views on the negative impacts on our local economy are a bit half-hearted: while 70% of our respondents agree with the statement “Canadians shopping in the US regularly are really hurting our local economy”, only 25% agree strongly and 25% actually disagree with this idea.
- Related to this, only half (51% total; 15% strongly) agree that that this behaviour might result in job losses: “Canadians are losing jobs because too many Canadians shop in the US instead of locally.”
In summary, it seems that we are looking out for our own personal economic good before considering the broader context.
Insights West will continue to study cross-border shopping habits, and examine how consumers perceive its impact on their community.