Canadians plan to spend 17% less on the holidays this year, says Deloitte

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Canadians expect to spend 17% less on the holidays this year, says Deloitte

According to Jason Vickers, Partner at Deloitte, worries about the economy have grown over the past year.< /p>

Inflation and economic uncertainty are playing the party game as Christmas approaches. Canadians expect to spend $1,520 on the holiday on average this year, down from last year but more than in 2020, according to consulting firm Deloitte.

Of that amount, $390 should go to gifts, $120 to gift certificates and $283 to groceries, the Deloitte survey says.

The biggest spending reductions from last year will, according to the firm, be in:

  • Electronics for personal use (-55%)
  • Travel (-30%)
  • Clothing for personal use (-27%)

Only 15% of respondents say they will shop for themselves or give themselves gifts this year, compared to 20% last year.

Jason Vickers, a partner at Deloitte, notes that while worries over the past few years related to the pandemic have waned, worries about the economy have grown.

“There is a lot of uncertainty this year about the direction of the economy, the high inflation, rising interest rates and all geopolitical upheavals.

— Jason Vickers, Retail Specialist, Deloitte

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More than four in ten respondents say their household finances have deteriorated this year.

Soaring food prices are also prompting Canadians to slash discretionary spending like gifts, adds Deloitte.

According to the survey, 48% of Canadians expect that the economic situation will worsen in 2023 (this figure is 52% in Quebec).

Holiday spending in Ontario and the Atlantic must exceed the Canadian average this year.

On the contrary, residents of the West and especially Quebecers plan to spend less than the national average.

Mr. Vickers notes that Quebec, on the other hand, has a higher rate than the Canadian average of people who plan to celebrate the holidays with family and friends, which would be a higher priority for them than giving expensive gifts, says- it.

“Quebecers are bon vivants and want to celebrate with others and use their money for that and less for shopping in stores. »

— Jason Vickers, Partner, Deloitte

Economic uncertainty is undermining consumer confidence, stresses Jason Vickers from Deloitte.

Deloitte's poll indicates that a majority of Canadians (51%) prefer to shop in person over online this year.

After a strong upturn the last year (49%), in-store purchases are now almost as high as before the pandemic in 2019 (52%).

C' was a big surprise [from this year's survey], says Vickers, adding that Canadians plan to visit an average of 5.9 stores this year for their holiday shopping, compared to 5.3 last year and 6 ,4 in 2019.

“There are still a lot of consumers who like to touch [store product], to feel. »

— Jean-Luc Geha, professor of marketing at HEC Montreal

HEC Montreal marketing professor Jean-Luc Geha expects early sales from merchants this year.

David Soberman, professor at the Rotman School of Management at #x27;University of Toronto, agrees.

“After being locked up at home for three years, people have a desire to go out and shop, run errands as usual. »

— David Soberman, professor of marketing

Sees this as a positive sign for stores that have suffered from the pandemic.

Like Professor Geha, however, he believes that the labor shortage may pose challenges for merchants during the busy holiday season.

There are still positive signs in the data, according to David Soberman, professor of marketing at the University of Toronto's Rotman School of Management.< /p>

One ​​in three Deloitte survey respondents say they will shop earlier this year, hoping for better deals.

For its Holiday Spending Snapshot, Deloitte surveyed 1,000 Canadian adults online from September 6-12. The sample is representative of the entire population with respect to age, gender, financial status and geography, the firm says.

The margin of error associated with a sample of this size is +/- 3% at a 95% confidence level, adds Deloitte.

For Professor Geha, the drop in planned holiday spending this year represents a return to “normal” when it comes to Christmas gifts.

“During the time of COVID, people had money, they were at home and they were looking for ways to either treat yourself, reward yourself, or pass the time. So yes, there was a big Christmas period in previous years, but here we are a bit like in the pre-COVID years.

—Jean-Luc Geha, Marketing Expert

He adds that spending on electronics often swings in “waves” and depends on the release of new, in-demand products. However, no new game console, for example, is launched this year. As for cutting travel spending, fears surrounding another wave of COVID-19 may be a deterrent, he says.

That said, Geha notes that inflation and fear of a recession also seem to be causing many consumers to tighten their belts.

“People are starting to wonder about the portion of the budget that is more discretionary. »

— Jean-Luc Geha, professor at HEC Montreal

According to Professor Soberman, the survey data presents bad news for some merchants like electronics retailers, but good news for those who sell food, in particular.

“When we talk about groceries and the products we eat during the holidays, we can still have a very good year [for merchants ], because when people feel a little negative about the future […] they still want to do something special for the holidays. »

— University of Toronto Professor David Soberman

Professor Soberman also notes that there are many clouds on the horizon for 2023. He hopes for an end to the conflict in Ukraine and a stabilization of inflation, but he fears a recession like many.

To meet holiday demand, Canada Post plans to hire almost 4,500 additional seasonal employees this year and add nearly 1,550 vehicles to its fleet, in addition to using “temporary off-site processing facilities” in Toronto, Quebec City, Calgary and Vancouver.

As a result of the pandemic, our research shows that more than a third of online shoppers in the country want to shop locally, and one in five want to support small businesses, argues Canada Post.

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