Kinsella is one of a record 1,000 international tourists who scheduled organized shopping trips yesterday to Wrentham Village Premium Outlets - more than double the number last year. Hundreds more were expected to come on their own, according to Beth Winbourne, the outlet's general manager ... But now American wares are even more of a bargain as the slowing US economy has weakened the dollar. Further, as the Federal Reserve has cut interest rates to boost the economy, the dollar has lost even more value, and global investors have realized they won't earn as much when they park their cash in greenbacks. As a result, the euro has shot up by 33 percent compared with the dollar since 2002, so Europeans who exchange 1,000 euros now get close to 1,500 US dollars. And the Canadian dollar is worth as much as the US dollar for the first time in three decades.
But some are worried that the boost in sales will not be that great, while others have turned to advertising:
The Retailers Association of Massachusetts, for instance, predicts a mere 2.2 percent increase in holiday retail sales this year over the same period last year, about half the sales growth forecast by the National Retail Federation. And the federation's prediction of a 4 percent increase in sales to $475 billion would make this holiday the slowest for sales growth since 2002, when sales rose 1.3 percent. "The holiday sales season of 2007 will create competitive and profitability challenges for local retailers," said Jon B. Hurst, president of the state retail group. "There's no question that European and Canadian shoppers have been key targets of late." In fact, officials at Simon Property Group and General Growth Properties, two of the country's largest mall operators, said they have increased international advertising to promote shopping excursions for foreign travelers. And the weak dollar, coupled with promotions, seems to be working.
Don't worry, our stalwart customs and immigration officials at Logan Airport will make sure those Europeans don't come back a second time to loot our goods.
ReplyDeletefor what it's worth, it's called a "dollar depreciation" (not devaluation) unless the fall in the dollar is a matter of deliberate policy (as under a fixed exchange rate system).
ReplyDeleteJim Devine
I wonder how relevant currency depreciation is in these times of industry being dominated by a handful of multinational giants. I suspect that it may simply be an underhanded way for the US Government to minimise its debt to the rest of the world and for the workers and businesses, without bargaining power, to take a paycut.
ReplyDeleteLarge corporations can simply increase their prices.
No limit to price increases
ReplyDeleteeven as "the consumer"
stumbles in the land
of stagnant wages
debt service
asset dee
flation?