TORONTO - A report by the Bank of Montreal predicts that growth in holiday sales in Canada will be weaker than last year but still decent, despite the global economic turmoil.
The bank forecasts sales will be restrained by high household debt, modest wage growth and turbulent equity markets.
Cross-border shopping is also expected to remain a thorn in the side of retailers, despite a drop in the loonie in recent weeks.
However, low interest rates, relatively low unemployment, and steadier gasoline and food costs are expected to help support sales.
And BMO says not all households are overstretched, and those that aren't can borrow cheaply.
Excluding cars and gas, BMO predicts retail sales should grow 2.5 per cent compared with a year ago in November and December compared with 3.1 per cent a year ago.
