Canadian consumers plan to ramp up their spending this holiday season. Yet they’re determined to find savings, cut back on discretionary spending and creatively stretch their holiday budgets.
They’re thoroughly researching and comparing products, seeking promotions and discounts with greater sophistication. Visiting shops in person is crucial in this process, as consumers consider in-store shopping a central part of their holiday experience.
But consumers covet more than just low prices. They want greater value in return for their holiday dollars. Consequently, they’re seeking higher-quality items, buying second-hand products and expecting brands to embrace sustainability values that match their own.
To better understand what matters most to shoppers this holiday season, we surveyed 1,000 Canadian consumers late this summer. Below is an excerpt of what they told us.
Consumer spending in Canada: A season of gifts, gatherings and getaways
Canadian consumers plan to spend an average of $1,853 on gifts, travel and entertainment this holiday season, a 13% increase over last year. At the same time, their economic outlook is brightening as inflation and interest rates decline: 65% believe the economy will stabilize or improve over the coming months, up from 48% a year ago.
But the rise in spending intentions doesn’t necessarily mean all consumers plan to buy more. Shoppers are conscious of recent price increases and recognize they need to spend more to obtain many of the same products and services they regularly purchase. Indeed, 81% told us they expect to see higher prices for all items this year.
When examining generational spending habits, we found younger consumers plan to spend the most and increase their holiday budget over last year (see chart). This trend coincides with more Gen Z consumers entering the workforce and gaining additional disposable income. At the same time, many millennials are advancing in their careers and shopping for their growing families.
Younger consumers set to bring cheer to retailers this holiday season
Holiday travel expenses plummeted during the pandemic but have jumped 59% over the last two years as consumers spend more to visit friends and family or take vacations together. Spending on gifts also increased over the same period, though by a more modest 9%. A closer look at these gift-buying patterns reveals several emerging trends as younger consumers forge their own distinct holiday shopping habits, including that Gen Z starts shopping earlier. Consumers of all ages plan to do most of their shopping between Thanksgiving and Black Friday weekend. But 21% of Gen Z respondents (compared to 11% overall) told us they’ll complete most of their shopping before Thanksgiving.
Shoppers search for savings
Consumers revealed they’d spend more than last year when they added up their estimated 2024 holiday expenses. But at the same time, many want to limit their spending. When asked to compare their spending intentions to last year, 77% said they want to spend the same amount or less. This suggests that while consumers recognize they’ll pay more for many products this holiday season, they'll aggressively try to reduce their expenses.
The evolution of in-store holiday shopping
Consumers still consider in-store shopping an important part of the holidays. Nearly one in five (17%) told us they shop in physical stores more often during the holidays. This segment of shoppers is important for retailers, as these consumers intend to spend 9% more during the holidays than the average Canadian consumer.
How to meet consumers’ sustainability expectations
Our previous research shows Canadian consumers care about sustainability—and will pay more for it. This holiday season, 73% of consumers said ethical business practices are an important factor when choosing the brands they buy from. That’s the highest-ranking environmental, social and governance (ESG) factor after product safety and quality (81%).
To learn more about the consumer preferences and behaviour trends shaping the holiday shopping season, read the full report here.
Originally published on PwC.com.
