BUSINESS: Canadian exchange rate helps North Country businesses

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August 20, 2007

By DAN HEATH The Press Republican Mon Aug 20, 2007, 07:55 AM EDT

The increasing strength of the Canadian dollar compared to the U.S. dollar is resulting in large increases for North Country businesses.

Wednesday, the Bank of Canada Web site showed the Canadian dollar worth 93 cents. It was worth 91 cents last June and 62 cents in January 2002.

Matt Nephew of Nephew's Discount Liquor and Wine in Champlain said that's a incredible rate for his Canadian customers. He said the store has a very heavy Canadian traffic flow right now.

"Last year was a great year, and this year's even better," he said. "We're busier by at least 10 percent, and last year was a big year."

Nephew said things really picked up around the end of May. Liquor wholesalers he's spoken with are reporting increased Canadian business as far away as Lake George, Lake Placid, Massena and Malone.

"I've been here 11 years. My first year, the exchange rate was 71 cents," Nephew said.

For three of those years, it was in the low 60s, he said.

He credits Pomerleau Real Estate for taking care of the struggling shopkeepers during those lean years. The plaza is now the most full he's ever seen it.

Nephew said to be successful along the border, a liquor store needs a 50-50 mix of Canadian and American customers. His store has at least that ratio of Canadian customers.

That customer base leads him to increase his inventory of French and Australian wines threefold in June, July and August. In October, he flips back to more California and other domestic wines.

Nephew said business starts to pick up on Thursday night and Friday, when Canadians head down to their camps and boats in the area.

The opening of the Price Chopper in the plaza has also been a big boost, Nephew said. He said a lot of his clientele stops at the grocery and his store, then heads to the marina. Some of that business was probably lost to Plattsburgh while there was no grocery store in Champlain.

Champlain Centre Marketing Director Joan LaPier said Canadian business is also up at the mall. The Canadian business started to increase last year, she said.

"Last year and this year, the increase has been 35 to 50 percent," LaPier said. "We document that by traffic counts."

LaPier said Monday, which was the annual Civic Holiday in Canada, found many Canadian shoppers in Plattsburgh. That's unusual for a weekday.

She said shoes and jewelry are among the popular items.

"Gold is less expensive in the U.S.," LaPier said.

Canadian shoppers are also attracted to stores that aren't available in Canada, such as New York and Company, Victoria's Secret and Bath and Body Works.

"I canvass the stores every week on how business is going. For some stores, Canadians represent anywhere from 25 to 85 percent of their business," she said.

Due to the increased business, stores are welcoming Canadian shoppers with open arms.

"So many of them don't remember when the Canadian dollar was so strong," LaPier said.

Some stores are looking for ways to provide better customer service. She said Hot Topic was looking at a debit card reader that can read Canadian cards.

Derek Sprague at Malone Golf Club said the club has seen a 15 to 20 percent increase in daily greens fee play by Canadian golfers.

"This is better than last year, and last year was a good year," he said.

Area motels offer golf packages at par. Motel operators take reservations and make tee times for their guests at the course.

About 80 percent of those golfers are repeat customers, some with 15 years or more of making a trip to play Malone.

"Golf packages are so important to the community. On some weekends, our golf packages take up 50 to 60 percent of the rooms in the Malone area," Sprague said.

He said the club brings about 25,000 tourists to the Malone area every year. There is a trickle-down effect, as the golfers also shop, buy gas and groceries while they are in town.

He said the main market for stay-and-play packages is Ontario, especially Ottawa, which is a two-hour drive. Quebec golfers are more likely to do a day trip, as it's only about an 80 minute drive from Montreal.

"We've been marketing that area for about 20 years," Sprague said. "We do a trade show in Montreal and Ottawa in March of each year. It gets everybody excited for the golf season."

Malone Golf Club also does a lot of print and television advertising in those markets, he said.

Of the club's 880 members, about 120 are from Quebec. They are from villages like Ormstown and Huntington, and quite a few are from Montreal, he said.

Due to the long waits at many Canadian clubs, they can come down to Malone, play 18 holes and return home in about the same time it would take to play in Canada, Sprague said.

The golfers that do come to the club are not as price conscious as they were when they had to add 30 percent to the cost of a purchase.

"In most cases, our equipment costs significantly less than prices in Canada," Sprague said.

Some golfers bring down fliers and newspaper ads that show they save $200 on a good set of golf clubs by buying at Malone Golf Club, he said.

One potential drawback is the looming Western Hemisphere Travel Initiative, which would require a passport or other government-issued identification card such as a driver's license and proof of citizenship, such as a birth certificate to enter the United States by Jan. 1, 2008.

Sprague said the course has lost business because of golfers being turned around at the border, or because organizers of corporate events decided it was too much hassle to try to bring a busload of golfers across the border. He estimated the course has lost $500,000 due to that since 2001.

It doesn't help when radio stations broadcast lengthy wait times at the larger crossings, such as Champlain or Cornwall. The club shows smaller crossings in its brochures, where waits are usually short.

"I think the perception is worse than the reality," Sprague said.

Michele Powers of the Plattsburgh-North Country Chamber of Commerce's Adirondack Coast Visitors and Convention Bureau said the exchange rate is having an incredible effect on the North Country's summer season.

"Last year was a great summer. It's exciting to hear the increases people are reporting on top of that," she said.

There have been many wonderful anecdotes about the effects of an improved exchange rate. One is from the Natural Stone Bridge and Caves in Pottersville.

"They are about halfway through their season. They already have a 31 percent increase over last year," Powers said. "Every month for the last six months has been an all-time record."

She said a visitor to the chamber's information center told her commented on seeing all the Quebec license plates and hearing the French accents downtown. The trend has also been noticed at the information center.

"We have a lot of visitors in here anyway. That has increased," Powers said.

"We're seeing a lot of day trippers. A lot of people are also staying longer."

The chamber conducted a major marketing campaign in Montreal this spring, which Powers said turned out to have been perfect timing.

It also printed up 65,000 travel guides and has already distributed 90 percent of them. The chamber is also marketing through its Web site and e-mail.

It also plans to market the region and Plattsburgh International Airport at the International Tourism and Travel Show in Montreal on Oct. 26-28.

"That was a great show for us last year," Powers said.

Things could get even better, she said.

"I think the Canadian dollar is just going to get stronger. They're saying it may be at par by the end of the year," Powers said.