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Big price gap still exists between Canadian, U.S. goods: study -- http :// www .cbc.ca/money/story/2008
Big price gap still exists between Canadian, U.S. goods: study -- http :// www .cbc.ca/money/story/2008
======================There are many noticeable "Consumer Goods Basket Items" that don't have
price parity between Australia and NZ. You need only go to Woolworths(.co.nz
vs ,com .au) to see the difference.
If Australians ate Lolly Cake etc ... that would be different. Oddly NZ does
not consume the Cherry Ripe, so many confectionery economics arguments can't
be made here ... but American Imp ist "Big Mac" economics arguements don't
entirely break down either.
However, the NZD has not reached the AUD in years (or ever?) so the AUD NZD parity argument is not totally applicable to these kinds of analyses.
When Australia and NZ were in the Sterling Zone (before 1966-1967) -- the
same currency value disparity was still in effect.
I must also add that NZ's physical isolation [in consideration to the global
shipping lanes] must add a bare minimum of 5% to all consumer goods prices
vs Australia.
NZ's main milk conglomerate Fonterra says NZ consumers pay 4% less than
"rest of world" consumers for their milk products ... so one must assume
that the NZ agricultural goods are 5% discounted for NZ consumers.
However, the "near parity analysis" just does not work for the US vs CAD
"cost of goods" as North America and the Caribbean [are effectively] a "self
sufficient" trade zone. Although Australia and NZ have a closer Free Trade
Zone relationship, economic interoperability will take 25 years to achieve.
It must be said that the "US vs CAD price differential" has always been due
[in part] to Canada's somewhat Australia like social safety net -- and
Australian like economy (primary industries dependency vs services
industries dependency).
===================
Big price gap still exists between Canadian, U.S. goods: study
http :// www .cbc.ca/money/story/2008/06/11/pricegap.html
Canadians are still paying much more than Americans for many of the same
goods, even though the loonie has been near parity with the U.S. dollar for
much of the past year, a new report says.
In a followup to a study done last year, BMO Capital Markets said the gap
between what Canadians pay and what U.S. consumers pay on a collection of 17
items has narrowed only slightly - from 24 per cent to 18 per cent.
"The price gap remains extraordinarily large," said the study's author, BMO
Capital Markets deputy chief economist Doug Porter.
Furthermore, Porter said the signs suggest the bulk of the price cutting may
be over.
Comparison Shopping
Product Canadian Price (Cdn $) U.S. Price (US$) Gap (%)
Nintendo Wii 279.99 249.99 12%
Apple iPod Touch 16GB 419 399 11%
Huggies Pullups (40) 18.97 14.97 27%
Toro Snow Thrower 399 299 33%
-- Source: BMO Capital Markets
"In other words, without further pressure, this may be as good as it gets
for Canadian shoppers," Porter said.
Last year, when the Canadian dollar was ascending sharply towards its peak
of $1.10 US, consumers here howling that prices of goods were not falling to
reflect that growing purchasing power.
Porter said companies argued last year that they needed time to adjust
prices to reflect parity between the two currencies. "Well, the loonie has
averaged almost parity over the last year (98.8 cents US to be precise), so
time's up," he said.
Over the past year, prices on some goods - especially on high-profile items
like books and automobiles - have indeed narrowed. But large gaps still
remain.
The survey found that the average price of five mid-range cars was, on
average, 19 per cent higher in Canada. Discounted books were still 21 per
cent more expensive.
A sample of eight point-and-shoot digital cameras found a 26 per cent price
gap between the two countries ($374 in Canada versus $297 US south of the
border.)
A Maytag washer and dryer was 21 per cent more expensive in Canada than in
the U.S., while a Nintendo Wii was 12 per cent more expensive here.
The only good news in BMO's sample survey was in the cost of the Grand Theft
Auto video game. It cost $59.99 in both countries.
Porter said the price cuts that did take place after the Canadian dollar
moved towards parity with the U.S. greenback have helped to keep Canada's
inflation rate in check. The loonie's rise has also helped insulate the
country from some global inflation pressures on food and energy, he notes.
But since the start of the year, the loonie has been hovering in a range
between a low of 96.44 cents US and a high of $1.0298 US.
"With the currency stuck in the doldrums, and many predicting it could even
retreat in the year ahead, it seems unlikely that there will be another big
spontaneous push to drive Canadian prices considerably lower," Porter said.
"Firms are pricing to what the market will bear," he told CBC News. "The
U.S. is the most competitive market in the world and of course the U.S.
consumer is in recession, so we are seeing much more price restraint in the
U.S. than in Canada."
Porter urges Canadians to comparison shop and when big discrepancies are
found between Canadian and U.S prices, he suggests consumers ask the
retailer to justify or explain them.
======================There are many noticeable "Consumer Goods Basket Items" that don't have
price parity between Australia and NZ. You need only go to Woolworths(.co.nz
vs ,com .au) to see the difference.
If Australians ate Lolly Cake etc ... that would be different. Oddly NZ does
not consume the Cherry Ripe, so many confectionery economics arguments can't
be made here ... but American Imp ist "Big Mac" economics arguements don't
entirely break down either.
However, the NZD has not reached the AUD in years (or ever?) so the AUD NZD parity argument is not totally applicable to these kinds of analyses.
When Australia and NZ were in the Sterling Zone (before 1966-1967) -- the
same currency value disparity was still in effect.
I must also add that NZ's physical isolation [in consideration to the global
shipping lanes] must add a bare minimum of 5% to all consumer goods prices
vs Australia.
NZ's main milk conglomerate Fonterra says NZ consumers pay 4% less than
"rest of world" consumers for their milk products ... so one must assume
that the NZ agricultural goods are 5% discounted for NZ consumers.
However, the "near parity analysis" just does not work for the US vs CAD
"cost of goods" as North America and the Caribbean [are effectively] a "self
sufficient" trade zone. Although Australia and NZ have a closer Free Trade
Zone relationship, economic interoperability will take 25 years to achieve.
It must be said that the "US vs CAD price differential" has always been due
[in part] to Canada's somewhat Australia like social safety net -- and
Australian like economy (primary industries dependency vs services
industries dependency).
===================
Big price gap still exists between Canadian, U.S. goods: study
http :// www .cbc.ca/money/story/2008/06/11/pricegap.html
Canadians are still paying much more than Americans for many of the same
goods, even though the loonie has been near parity with the U.S. dollar for
much of the past year, a new report says.
In a followup to a study done last year, BMO Capital Markets said the gap
between what Canadians pay and what U.S. consumers pay on a collection of 17
items has narrowed only slightly - from 24 per cent to 18 per cent.
"The price gap remains extraordinarily large," said the study's author, BMO
Capital Markets deputy chief economist Doug Porter.
Furthermore, Porter said the signs suggest the bulk of the price cutting may
be over.
Comparison Shopping
Product Canadian Price (Cdn $) U.S. Price (US$) Gap (%)
Nintendo Wii 279.99 249.99 12%
Apple iPod Touch 16GB 419 399 11%
Huggies Pullups (40) 18.97 14.97 27%
Toro Snow Thrower 399 299 33%
-- Source: BMO Capital Markets
"In other words, without further pressure, this may be as good as it gets
for Canadian shoppers," Porter said.
Last year, when the Canadian dollar was ascending sharply towards its peak
of $1.10 US, consumers here howling that prices of goods were not falling to
reflect that growing purchasing power.
Porter said companies argued last year that they needed time to adjust
prices to reflect parity between the two currencies. "Well, the loonie has
averaged almost parity over the last year (98.8 cents US to be precise), so
time's up," he said.
Over the past year, prices on some goods - especially on high-profile items
like books and automobiles - have indeed narrowed. But large gaps still
remain.
The survey found that the average price of five mid-range cars was, on
average, 19 per cent higher in Canada. Discounted books were still 21 per
cent more expensive.
A sample of eight point-and-shoot digital cameras found a 26 per cent price
gap between the two countries ($374 in Canada versus $297 US south of the
border.)
A Maytag washer and dryer was 21 per cent more expensive in Canada than in
the U.S., while a Nintendo Wii was 12 per cent more expensive here.
The only good news in BMO's sample survey was in the cost of the Grand Theft
Auto video game. It cost $59.99 in both countries.
Porter said the price cuts that did take place after the Canadian dollar
moved towards parity with the U.S. greenback have helped to keep Canada's
inflation rate in check. The loonie's rise has also helped insulate the
country from some global inflation pressures on food and energy, he notes.
But since the start of the year, the loonie has been hovering in a range
between a low of 96.44 cents US and a high of $1.0298 US.
"With the currency stuck in the doldrums, and many predicting it could even
retreat in the year ahead, it seems unlikely that there will be another big
spontaneous push to drive Canadian prices considerably lower," Porter said.
"Firms are pricing to what the market will bear," he told CBC News. "The
U.S. is the most competitive market in the world and of course the U.S.
consumer is in recession, so we are seeing much more price restraint in the
U.S. than in Canada."
Porter urges Canadians to comparison shop and when big discrepancies are
found between Canadian and U.S prices, he suggests consumers ask the
retailer to justify or explain them.
