Calgary is in higher spirits after the community rallies to save its premier event, proving that even a natural disaster can’t stop the Stampede. Across Canada, retailers can look forward to a promising Q3.
Alberta businesses recovering from June’s massive floods
After Alberta suffered intense flooding in June – the worst floods in the province’s history – the economy took a major hit1. As the massive cleanup effort began, things were looking bleak for local businesses2. It didn’t help that the Calgary Stampede, scheduled to open in less than two weeks, was also in trouble: the famous Grandstand3 and Saddledome were filled with water4, and the Stampede grounds were a mess of mud and debris5.
A lot rides on the success of the Stampede – it injects up to $400 million into the provincial economy annually6. The event had never been cancelled in its 100-year history, and this year’s organizers weren’t about to break that record7. They vowed the show would go on, and despite huge challenges, they succeeded.
Calgarians have shown enormous perseverance in the face of disaster – and this year’s Calgary Stampede is a true testament of their resilience and spirit"Jeff Guthrie, Chief Sales and Marketing Officer at Moneris Solutions
Local businesses, already hurt by floods and facing the prospect of losing more income, had cause to celebrate: consumer spending jumped 45.38 per cent during the Stampede, compared to the week of floods, with increases for eating establishments, entertainment and hotels. Remarkably, despite year-over-year drops for many categories, overall spending during the Stampede was only 5.76 per cent lower compared to 2012. In fact, drinking establishments and fast food saw year-over-year increases**.
“Despite major hurdles, Calgarians rallied to support the iconic annual event, and, while this year’s Stampede may have seen slightly lower spending compared to 2012, the decrease is not as great as many expected,” says Guthrie.
Spending up in Q2
More good news: Across the country, consumer spending was up 3.61 per cent in the second quarter, compared to Q2 2012. Also notable in Q2, year-over-year debit card spending outpaced credit card spending, suggesting that Canadians may be cautious about adding to household debt.
Restaurants, retail and entertainment had the most growth.
Within retail, the biggest gainers were bookstores, bicycle shops and pet shops, while camera stores, stationery shops and florists saw declines.
“Despite a slight dip in June, Canada’s consumer spending continued to experience steady growth in the second quarter,” says Guthrie. “Given the consistent pattern of spending increases over the first two quarters of 2013, we anticipate this positive trend will continue into Q3 and the holiday season.”
So, Canadian retailers have reason to be optimistic for the remainder of 2013. That includes businesses in Alberta, despite the devastating floods. It was Canada’s second-highest-spending province in the second quarter, thanks to strong growth in April and May (6.32 per cent and 7.46 per cent, respectively, and 6.10 overall for Q2)**.
1 - “Province says flooding is worst in Alberta history; 25 states of local emergency in place” by Edmonton Journal, 2013. Article available at http://www.edmontonjournal.com/news/Province+says+flooding+worst+Alberta+history+states+local+emergency+place/8565439/story.html#ixzz2X5IWqgwc
2 - ”Flooding to cut Alberta economic activity by $500 million to $1.5 billion in short-term” by Calgary Herald, 2013.Article available at http://www.calgaryherald.com/news/Flooding+Alberta+economic+activity+million+billion+short+term/8582300/story.html
3 - “Producer promises a grand Grandstand Show for post-flood Calgary Stampede” by Calgary Sun, 2013. Article available at http://www.calgarysun.com/2013/07/04/producer-promises-a-grand-grandstand-show-for-post-flood-calgary-stampede
4 - “Inside the Saddledome: Photos reveal scale of the damage in Calgary Flames’ flood-ravaged home” by National Post, 2013. Article available at http://news.nationalpost.com/2013/06/25/inside-the-saddledome-photos-reveal-scale-of-the-damage-in-calgary-flames-flood-ravaged-home/
5 - “Calgary Stampede to go on ‘come hell or high water,’ president vows” by The Globe and Mail, 2013. Article available at http://www.theglobeandmail.com/news/national/calgary-stampede/article12771201/
6 - “Economic and fiscal impacts of flooding in Alberta” by TD Canada Trust, 2013. Article available at http://www.td.com/document/PDF/economics/special/EconomicandFiscalImpactsoftheFloodinginAlberta.pdf
7 - “Calgary Stampede to go on ‘come hell or high water’” by CBC News, 2013. Article available at http://www.cbc.ca/news/canada/story/2013/06/24/canada-calgary-stampede-alberta-flood.html
** - All other figures not cited in the article are based on Moneris’ Q2 Spending Report, 2013.
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