The Canadian dollar and spa sales

[Steve]

Being a bit out of the loop, I was wondering how the strong Canadian dollar is impacting sales and pricing in your region? What effect do you think it will it have in 2008 on your business if this trend continues or even stabilizes where it's at?

[Dr. Spa™ Ret.]

I'm hoping for more sales into Canada.   I do know I've picked up some international business that's turned away from Canadian competitors due to the rising loon.




Land of the free, home of  the brave, approaching "third world country" status due to the decline of the all American buck.

[loosenupspas]

the short term upside to a devalued dollar is a rise in exports....more factories are operating to make american goods, more foreign investment because america is sold at a discount etc......long term inflation creeps in, imported goods cost more....like BMW's, oil and barrowed money.  Devalued dollars is a strategy that will have short termed positives, Clinton did it immediately after his election.  Bush has handled the economy well, but the lowering of the dollar wasn't a strategy more an accident, thus it is more difficult to recapture dollar value.  The fed is pumping money in the system and this too lowers the dollar.  A solid direction is lower the interest rates, restrict fed money and create more private monitary activity, such as buying fancy 2008 hot tubs.  I don't think hot tubs are very popular in 3rd world countries........American dollar should be supreme....this is best for america.....Lets go sell some hot tubs today.  The british are buying tubs for their USA vacation homes.......one advantage to the low dollar to the pound sterling.......

[windsurfdog]

Bush has handled the economy well...

...like, for starters, inheriting the first budget surplus this nation has seen in years and turning it into the largest budget deficit in our history. :-/

(Sorry loosenup, I promise to keep future comments to hot tub related issues.)

[Spatech_tuo]

(Sorry loosenup, I promise to keep future comments to hot tub related issues.)

I started to respond to that same comment because it's difficult for me to see or hear anything positive about our president's performance and not comment. The problem with responding is it tends to kill the spa related portion of the thread and besides, nowadays almost everyone either fully supports Junior or fully despises the fact that he's actually in office so debating his effectiveness tends to get us no where (though it can be fun).

Now if this was in the "General info" section where we go off any topic...

[Jacuzzi Jim]

 Being only 20+ minutes south of the Canadian border and an hour south of Vancouver BC, we have only had 1 spa sale to the North in 6 years.   About the only real customers I get from Canada are buying chemicals and filters.

 The outlet malls,the regular malls and many small type places around here I am sure doing very well.  For me spa sales are down and I am sure many other dealers across the nation are down as well.

[John-D]

The high Canadian dollar has had an impact on our sales.
The retail prices on all spas and a lot of accessories in our store have come down 12-15%.
Over all it's been a great year with the last quarter showing a very healthy double digit increase in sales.

How-ever the increase in our sales means less people have been buying from 2 of our main competitors who sell Canadian brands as there prices have not changed.

It’s interest that almost every person walking through the door shopping for a tub will ask if our prices are adjusted to the current exchange rate.

If the Canadian dollar stabilizes and stays on par with the US dollar, I think it will have a positive effect on our sales for 2008 as long as the economy does not slow down.

Steve, as someone how was in the industry and now looking from the outside in, what is your opinion on were the Canadian market will go, should the dollar remain on par?

John

[Pathfinder]

The way I see it, If our dollar remains above par Canadian built tubs should not increase hardly at all for dealers,as acrylic and most products are bought stateside which should offset the rise in petroleum based products produced in the US. The manufactures must realize if they increase 08 prices more dealers will consider looking for a second line from the US mainly because of the increased profit margins they will be able to achieve.

[Dr. Spa™ Ret.]

Are you not assumming that the majority of the costs that go into a spa are materials? What about overhead? Labor (including management and support personnel, not just assemblers), rent, insulance, gas/electricity, marketing (lower for US sales perhaps, but only the the actual print, not the labor and other overhead that goes into it), shipping...  blah blah blah blah..... Also, does not the declining US dollar mean an increase in foreign oil prices, aka plastics?

The way I see it, If our dollar remains above par Canadian built tubs should not increase hardly at all for dealers,as acrylic and most products are bought stateside which should offset the rise in petroleum based products produced in the US. The manufactures must realize if they increase 08 prices more dealers will consider looking for a second line from the US mainly because of the increased profit margins they will be able to achieve.

[Pathfinder]

The main company in Canada I can see being hurt by labour right now is our good friends at Arctic. Those who know the northern Alberta market know that people with skills can sorta pick where they want for the right money at the moment.So yes Labour can play a factor. Beachcomber is unionized so they know ahead whats coming for labour cost wise. But as I knew it last year most companies negotiated their price for acrylic sheets for the upcoming year around now. I do have an idea of extra running costs for the guys on the west coast of Canada. But many analyst are saying  everything is running on the cost of OIL and GOLD. If thats case the Canadian dollar will keep going as we have the largest oil deposit going and its your friends from above that supply the US with the most oil not the guys in the desert or south of the border as some state. But as I stated b4 the amount of savings from petroleum produced products should offset all the extras. Now if Canadian spa builders throw an increase for 08 that makes US dealers cringe and Cdn dealers go why they will be cutting there own throats.   Considering most dealers on their game know the costs of other producers. I will say Beachcomber is the most expensive tub for dealers to buy in the market right now. If they put in another increase I predict they will have an exodus like they had in Ont a few years ago when there was a threat of a production strike and dealers had to look at other possible lines. To the amazement of loyal dealers they found out how much more even with the high exchange rate they could make on US produced tubs and jumped ship.  If this doesnt change and there is an increase rest assured Canadian tubs will become a second line with only Edmonton being the exception.

This is just my take on the situation