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Toronto Retailers Are Ripping Us Off

Posted by Tim / November 11, 2007

25 Comments

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With the soaring Canadian dollar it makes less and less sense to buy local these days. And I don't mean the movement to buy Canadian products thereby reducing our carbon footprint; but rather buying any non-perishable goods like electronics, clothes and books that are available south of the border in the same form and quality as what's sold by Toronto area retailers.

It's gotten to the point of beyond ridiculous. Why splurge on those expensive pair of $300 Diesels when the same pair can be had for $100 less in New York state? Why buy the late Norman Mailer's Naked and the Dead for $14.72 online at Indigo.ca (already reduced 34%) when the same paperback is for sale for $10.88 US (or about $10 Canadian) from Amazon.com?

And these prices don't even include taxes which are 14% here compared to 0-4% in New York City.

It's understandable that many Toronto retailers have their hands tied. They might have negotiated prices for current inventory six months ago when the Canadian dollar was trading below par.

But my bet is that many retailers are just greedy. Some, like King West's Got Style, are at least trying to be fair to consumers, offering 10% off all inventory in a response to the currency move. But any C+ Math student knows that this still leaves a healthy price discrepancy versus the retail price in the US, even before calculating the exchange rate.

The worst offenders are the big chain and department stores like H&M, Walmart, Zara and Holt Renfrew who refuse to acknowledge the rapid change in market conditions. Well, their loss. Personally, I refuse to buy any clothes, electronics or other non-essential goods from these retailers until they not only close the price gap, but reflect that Canadian prices should actually be CHEAPER in this country.

So - and I'm talking to you now Apple Store - if the 16GB iPod Touch is $399 in the US, not only am I not going to pay $449 in Canada, but I'd even consider par value an insult instead of the exchange-rate adjusted value of something closer to $375.

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Tyson Williams / November 11, 2007 at 08:00 pm
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Canadians already started to BOYCOTT APPLE products until they reduce their prices to reflect the real exchange rates!

Check out the YouTube video:

http://www.youtube.com/watch?v=u4D6xQpk9hE

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Steady as she goes / November 11, 2007 at 08:04 pm
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This pre-supposes that retailers are buying stock in American dollars and selling in Canadian. Which in many cases isn't true. Book retailers, for one, buy mostly in Cdn dollars. Prices have been falling. Give it a few months. You can't have corrections overnight. Has anyone noticed that an average hardcover book, which used to cost $39 is now around $29?
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Jerrold / November 11, 2007 at 08:21 pm
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Books cost a lot more to produce and distribute in Canada, so they should cost more at the retail end.
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Piero / November 11, 2007 at 08:31 pm
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Retailers are in a bind and are dealing with public perception issues. Unless products are manufactured in the US, the real problem is that prices in the US actually need to go up, not Canadian prices coming down. The US is a net importer big time. It now costs them much more to import DVD players from Japan or China and to buy things like oil. Our oil prices have been tempered by a parallel currency rise. So US retailers have two choices to compensate for the higher cost of importing: rise prices or shrink profits. For the short term, most are accepting lower profits until their currency hedges run out and the xmas/US thanksgivig holiday is behind us. Jan 1 will ring in some major price increases in the US. That will considerably close the gap between US and Canadian prices.
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rek / November 11, 2007 at 10:16 pm
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If it has to be shipped to Canada before Canadians can buy it, it's always going to cost more than it does in the US. There are real costs that go into the price you see on the shelf, and expecting stores to absorb the price cuts is a great way to drive them out of business. Do you think the shipping companies and manufacturers will be cutting their prices to make and then ship things to Canada? Doubt it.

On a positive note: Silver Snail and the Labyrinth (and possibly the Beguiling, I don't know) are selling things at US or under US cover price. Comics fans rejoice!
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AG / November 12, 2007 at 03:02 am
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As much as I would love to see the prices on par with those in the US, the Canadian prices for electronics have always been significantly higher than those in the US. Part of it comes, I guess, from the fact that Canadian market is almost 1/10 of the US market, so it's easier to sell with lower margins in the States.
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uSkyscraper / November 12, 2007 at 10:13 am
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The old line about things should cost more in Canada due to higher distribution, metric, French.... is pure BS. Might have been true in 1907, but garbage today. It's just a question of what the market will swallow.

If it costs $20 to make something in China and ship it to Maine for retail sale, or North Dakota, or western Oklahoma, why should it cost more in Montreal or Edmonton? If the Gap sells a sweater for $30 in Manhattan, where rent is ten times that of Cleveland, why should the sweater cost more in Calgary? A guy in Taiwan putting the label on a TV could care less if it is in English, French or Swahili. Goods originally made for sale in Europe are converted to US measurements all the time, so why should it be a problem for Canada?

Canada has a market of 32 million. It might be spread across the continent, but this is no worse than parts of the US or anywhere else served by the global economy. Don't accept it, and the retailers will come around.
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Sheryl / November 12, 2007 at 10:23 am
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I think it's a test of patience. Within the next few weeks as the holiday shopping season gets into full swing, I think we'll see a lot more retailers caving in. Some money is better than no money, and if they don't want to lose their entire Christmas profit to stores in the US, Canadian retailers will have no choice but to slash prices drastically.
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Ray / November 12, 2007 at 11:27 am
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Think Apple's Canadian prices are too high? Go to ikea.com and look up the MANDAL bed. Then go do the same at ikea.ca. The price is 50% higher! It's not an anomaly?many items cost 40-50% more in Canada.
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Brian / November 12, 2007 at 11:58 am
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The worst is still cars, where some cars are actually manufactured in Canada, then shipped to the US where they're then sold for up to $10,000 less then in the country they were built.

For example, the Dodge Magnum (built in Brampton) starts at $25,000 in the US, and $30,000 in Canada.

Or, for cars imported from outside North America, you can get a Honda S2000 (their 240hp roadster) starting at $35,000 in the US. In Canada? Starting at $50,000.
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Alexander / November 12, 2007 at 01:21 pm
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A friend of mine just drove back a brand new 2008 Subaru Tribeca 7 seater last Friday and the pirce he paid in the States was about $31,000CAD before 14% tax, but the MSRP here is $52,500, and even if he could get it for $50,000 here after tax he still would have saved close to $22,000 plus PDI. There is no such thing as PDI in the States. It just upsets me a lot when I see major purchases like this that would cost us 30 to 40% more up here north of the border! I just advised a friend of mine last night to get his Toyota Sienna 8 seater from US even though they would have to buy it from one of the southern States since Toyota USA has already forced the dealerships close to the border to stop selling to Canadians! Nevertheless, for a saving of about $20,000CAD after tax I would not mind the longer drive back up here too!
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Gloria / November 12, 2007 at 01:55 pm
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1 000 000 Comix has always sold their comics at US cover price -- even before the Canadian dollar was at par. Give them your business.
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rek / November 12, 2007 at 02:59 pm
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Not everything in the world is made in China, and not everything (hardly anything) ships directly from the factory to the store, as I'm sure you know. If something is assembled in the US, or the shipment goes to a port in the US first and part is ear-marked for Canada, the cost is going to be higher because it still has to get to Canada. Which means fuel costs and driver/pilot/crew pay and transportation-related charges finding their way into the sticker price to keep it financially worthwhile selling in Canada.
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rek / November 12, 2007 at 03:02 pm
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I'm pretty sure Silver Snail has been selling at US cover price for years too. The Labyrinth has only been open 5 months (I just went there for the first time yesterday) and could use the business more.
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Ninja-bot / November 12, 2007 at 03:55 pm
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I totally blame the French language for the dollar's "problems".

Oh, and fuck Silver Snail. The charge you an extra nickle or dime for the plastic and paper board for comics. It's not expensive, but it's a useless *ding*. Watcher Comics in The Beaches FTW!
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Jack / November 12, 2007 at 08:02 pm
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i don't buy the theory that because of our smaller population, things HAVE to cost more...our salary in general is lower than that of the US, our rent is lower than Manhattan, SF, LA, etc etc most US companies don't even have a full marketing, R & D departments in Canada
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Christopher / November 12, 2007 at 10:26 pm
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REK: Hey, just checking in from The Beguiling comic book store in the Annex. We are, in fact, selling all of our comics and graphics novels at U.S. cover price right now. In fact, we're selling more-or-less all of our books at U.S. cover price, save like 2 or 3 publishers where we're getting the books from Canadian sources and we'd actually lose money on the sale. That and our selection is awesome. :)

Anyway, we just wrote about ur stance on the exchange on our blog at http://www.beguiling.com/, feel free to check it out.

Thanks,

- Chris, Manager, The Beguiling
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chephy / November 12, 2007 at 11:26 pm
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Why are there so many posts about comic book stores? What percentage of your budget do comic books make up? I don't care if they cost twice what they are in the U.S. as long the retailers stop ripping us off on things that make a more substantial debt in our budget, like clothing and electronics.
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Das Brain / November 13, 2007 at 12:58 pm
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Totally, agree with this post and that is why I'm heading to the U.S this weekend. Gonna do all my shopping while on my short vacation. I have been comparing prices online and at stores here in Ontario and all I can say is you are right. We are being ripped off, with the 14% tax and strong dollar, you are better off going south of border or ordering online from U.S online stores.
But Canadian retailers will never get it, cause they think they can get away with it.

That's my 2 cents.

Das Brain
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rek / November 13, 2007 at 05:20 pm
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chephy - Books and magazines are usually the first thing mentioned when talking about the price difference despite parity. So I mentioned some comic book stores that are (and have been for a while, it would seem) bucking the trend by not 'ripping us off'.
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dunksahoy / November 17, 2007 at 07:12 pm
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It would be impossible to ever have the same prices as the states on clothing, electronics, and cars. We have way too much duty, brokerage, and transportation fees to ever get the same prices as the US. Even if our dollar was worth as much as the british pound, Canadian retail prices would still be at least 10 to 15% more than the ticket prices in the US (as proven by the price of american goods in the UK). And how can you complain about the taxes we have to pay? Those taxes are what make this nation great. We wouldn't be able to suceed as a nation without those tax dollars. If you feel you can offer goods cheaper than all the stores in Canada, feel free to stop complaining and open your own shop. See how long you stay in business. Or just move to the states. Good riddance
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Dean / November 20, 2007 at 09:11 pm
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A new LCD TV (40inch Samsung LNT4071F) is more than $1000 cheaper in the United States ($2800 vs $1800). It doesn't matter how you want to spin it (marketing/population) there is absolutely no reason on Earth that a TV should be $1000 more in Canada. That's why I buy from the U.S. fu#k you Canadian retailers.
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Jason / November 28, 2007 at 02:01 pm
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Have you been to NYC? Sales tax 0-4%??!! Last time I checked, combined State and County sales tax in Manhattan was 8.375%. Similar rates for the rest of New York State.
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Tim / November 28, 2007 at 02:09 pm
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Yeah. I was just there. In Manhattan there is no tax on items less than $100 (or is it $120?) and 4% for items that cost more than that.
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Sharon / December 9, 2007 at 06:40 pm
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Well, I am not a retailer, but as far as I know, anything that is imported into this country that retailers buy and then sell to us DOES have duties on it. And as far as I understand it, the import duties here in Canada are higher than the ones in the US..could that be the reason that even retailers who ARE reducing prices still have prices higher than US retailers.

Just a little food for thought...
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