This year's back-to-school shopping season is expected to receive a passing grade from Canadian retailers.

Unlike their U.S. counterparts, where the outlook is not as bright - economic stimulus rebates and limited sales-tax holidays are being considered to kick-start back-to-school purchases - Canadian shoppers are expected to keep on spending.

"Back to school is the second busiest shopping season, behind the holiday shopping season, and definitely is an important time for the Canadian retailer," says Derek Nighbor, senior vice-president of national affairs for the Retail Council of Canada (RCC), which represents more than 40,000 storefronts of all retail formats across Canada.

The national average for back-to-school purchases should rise by about three to four per cent, according to the Toronto-based RCC.

File photo by Ken Kerr, Business Edge
Staples president and CEO Steve Matyas says the back-to-school season is his company's busiest time of the year.

More than six million public elementary, secondary and college students across the country are getting ready to hit the books, spurring shopping trips for clothing and accessories, electronics, school supplies and furniture.

"Outside of the provinces of Manitoba and Saskatchewan, we've seen a softening of retail sales compared to last year but we're still expecting to see positive growth in 2008 compared to 2007," says Nighbor. "This is not the early 1990s (recession) and we're not the United States. As challenging as it is in some markets, we're still seeing growth in Canada."

Retail sales have soared in both Saskatchewan and Manitoba this year, up 14.1 per cent and 8.4 per cent, respectively, for the period of January to the end of May, RCC figures show, with lower increases of 3.2 per cent in Ontario and 1.8 per cent in B.C. in the same timeframe.

For Alberta, however, retail sales have dropped by 0.5 per cent between January and the end of May. But the RCC adds that this is not totally unexpected, given the surge in retail sales in the province over the past few years. "You can't continue to see sales at that pace, so it stands to reason that you'd see a falling-off," says Nighbor.

Even with softer economic conditions in Canada and concerns about high gas prices, the RCC says shopping patterns here are similar to last year, with consumers turning to the usual sources - general merchandise stores, office specialty stores and clothing stores.

In the U.S., a study from the Washington, D.C.-based National Retail Federation paints a different picture, with discount stores clearly leading the list in virtually all age groups and sectors of the country for back-to-school spending.

"It's not perfect out there. That being said, our situation in Canada not nearly as dire as retailers in the U.S. are going through right now," adds Nighbor.

Scallywags, an independent Victoria-based children's boutique, says early indicators are looking good.

"It's a little early to tell at the beginning," says Christian Siemens, who owns the 1,300-sq.-ft. downtown store with his wife Lori.

"But if I can compare that against last year (which was very good), so far it's very, very close.

"Back to school is very important to us, it is more important than Christmas. It will make a huge difference."

At office-supply giant Staples, The Business Depot, based in Richmond Hill, Ont., back to school is also a crucial sales period.

"It's certainly our Christmas, it's our busiest time of the year bar none," says Staples president and CEO Steve Matyas.

"Our expectation for this season is that we will be modestly up from the previous year."

Part of the reason Matyas is optimistic is because of what he calls "hot pricing" on several hundred items compared to last year, due to the company's strong purchasing power and a fairly strong Canadian dollar.

Staples says it expects to sell a lot of computers and electronics to back-to-school shoppers, as well as traditional school supplies.

A recent survey conducted by Staples and Angus Reid shows 70 per cent of families are planning to buy or will consider buying a computer, software or computer accessories before the start of the school year.

But it's not all rosy. "What I heard from our vendors ... is that so far, it's been a slow start in the back-to-school space," adds Matyas.

Canadian retailers could also take a hit from Americans targeting Canadian shoppers.

U.S. mall operator Taubman Centers Inc., a real-estate investment trust that has interests in 24 shopping centres in 11 states, has put together back-to-school shopping packages for its four Detroit-area malls that are near the Canadian border.

The packages can include hotel stays, giftcards, discounts, and back-to-school giftbags or backpacks.

The malls also offer shoppers a different variety of stores, including major department chains and outlet offerings.

Early reaction is positive, says Karen Mac Donald, director of communications for the Taubman Centers, based in Bloomfield Hills, Mich.

"We're very pleased with the initial results," says Mac Donald. "It's really a win-win situation. It benefits Canadians as their dollar goes further and it benefits our stores and our malls with additional business."

While Taubman has promoted to Canadians before through advertising and hotel packages, the company has recently increased its efforts.

"Since the Canadian dollar has gotten stronger, we've seen a lot more Canadians over the past year."

One in three Canadians visited a mall in the U.S. last year, according to a Maritz Research poll conducted for Taubman in January 2008.

Meanwhile, a Canadian organization is hoping it has the answer for bargain-hunting students.

Student Price Card (SPC), based in Vaughan, Ont., offers a yearly discount card for a cost of $8.50 plus tax at select retailers or for $10.50 online.

There are 110 national and retail chains participating in the program, including Aldo, Bluenotes, Foot Locker, Guess, Roots, Sirens, The Bay and Urban Behavior.

The most common offers are 10 to 15 per cent off.

"On average, a student saves between $50 to $100 a year with the SPC card," says Nicholas Bianchi, director of loyalty marketing for SPC.

"We have built our program around what students have told us - when it comes to loyalty programs, they want instant gratification, choice, value and convenience.

"Having an SPC cards means they can go shopping today and save roughly $15 on a pair of sneakers, about $10 on a pair of jeans and maybe $5 on a knapsack - in just one day," adds Bianchi.

"That gets them $30 closer to a new text book or $30 closer to paying their rent."

(Laura Severs can be reached at laura@businessedge.ca)