People look through the window of a store on Boxing Day in Montreal on December 26, 2021. Stores in Canada are gearing up for Boxing Day sales, with many rolling out deals early in the hopes of enticing budget-conscious shoppers. The Canadian promotional retail event has been overshadowed in recent years by its American counterpart, Black Friday. But experts say Black Friday and Cyber Monday sales late last month fell short of expectations, leaving some stores with inventory to clear before the end of the season. THE CANADIAN PRESS/Graham Hughes
Stores in Canada are gearing up for Boxing Day sales, with some rolling out deals early in the hopes of enticing budget-conscious shoppers.
The Canadian promotional retail event has been overshadowed in recent years by its American counterpart, Black Friday.
But experts say Black Friday and Cyber Monday sales fell short of expectations last month, leaving some stores with inventory to clear before the end of the season.
“Black Friday is the most important day of the year for retailers and it was a bit of a bust,” said Lisa Hutcheson, managing partner at retail consulting firm J.C. Williams Group.
“We’re going to end up seeing some deep discounts around Boxing Day because it’s been a bit of a slower sales season. It hasn’t been those crushing crowds of December that we’ve seen in the past.”
Even with big discounts, consumers might be hesitant to open their wallets, she said.
“Inflation is really playing a big role, there’s a lot of fear,” Hutcheson said. “Boxing Day is typically for gift card redemption and personal shopping and if people are concerned about finances, there will be less personal shopping taking place.”
Stores will try to strike a balance between the need to sell surplus stock with maintaining their margins, retail analyst Bruce Winder said.
The bigger the discount the more volume of goods a store is likely to sell. Smaller discounts keep margins higher but run the risk of stores carrying excess merchandise that needs to be packed away in January, he said.
“In some cases you can pack away the inventory until next year but that takes labour dollars and you’ve still got to pay your suppliers for it,” Winder said. “It’s a drain on your working capital.”
Yet Retail Council of Canada national spokeswoman Michelle Wasylyshen said most retailers are not overly concerned with inventory levels – at least to the degree some analysts suggest.
The message that stores have too much stock may be partly to blame for lacklustre Black Friday and Cyber Monday sales, which she called “uneven at best.”
“The general feeling is that consumers were waiting for better deals, either because they have heard in the media that retailers have too much inventory, or because they have had to tighten their belts from the higher costs of living,” Wasylyshen said.
Still, stores are heading into Boxing Day and the end of the year retail sales period with “cautious optimism,” she said.
“The Boxing Day event is a welcomed opportunity for retailers to pre-plan promotional events and look at their inventory levels to see if in-store or online sales events are required to help eliminate excess inventory,” Wasylyshen said.
Much like Black Friday, she added that Boxing Day has become a week-long event, with fewer in-person doorcrasher sales that once epitomized the sales day.
This report by The Canadian Press was first published Dec. 22, 2022.
