Deloitte Canada: key insights around this critical weekend for consumers and retailers
Many consumers are taking advantage of Black Friday sales, but Canadians are planning to spend less this holiday shopping season than in any of the previous four years, according to a Deloitte Canada study.
The firm’s annual holiday retail outlook study found that Canadians plan to spend 11 per cent less this year than in 2022, for an average of $1,347. That’s lower than the $1,520 people planned to spend on holiday shopping in 2022 and the total of $1,841 in planned spending for 2021.
“The rest of the holiday shopping season is going to be really challenging,” Deloitte Canada’s national retail leader Marty Weintraub told BNN Bloomberg in a Thursday television interview.
He said that during the lead up to Black Friday, which is the unofficial kickoff to the holiday shopping season, Canadians went on the hunt for the best deals in an attempted to stretch their tight budgets as far as possible.
According to merchant sales data from e-commerce giant Shopify, Canadians spent 16 per cent more on American Thanksgiving – the day before Black Friday when many sales begin – compared to last year.
The average cart price was $172.30, with top product categories by orders being clothing, jewelry and personal care.
“Canadians are hoping to check off as many gifts off their list, although it might be fewer gifts to fewer people, they’re looking to be able to spread the love as far as they can in a really challenging year,” Weintraub said.
Weintraub said that even as retailers have tried to tempt shoppers with deals, many aren’t seeing the consumer traffic they’d hoped for so far this year, and some may opt to lower prices further.
“Most of them are saying: ‘We're worried,’” he said.
“They haven't necessarily unleashed all the deals they are ready to… but if traffic is not as strong as they expect in the next few days, we could see some lowering of prices into next week.”
Weintraub said that during the pandemic, consumers put a renewed focus on supporting smaller, local retailers, and that trend has continued, but only “to a certain point.”
He said small retailers have a harder time negotiating discounts from suppliers, and often can’t afford to take the financial hits that their bigger competitors can, making this year’s outlook particularly worrisome for them.
REGIONAL, INCOME DIFFERENCES
Consumers in different provinces seem to have distinct plans when it comes holiday spending, Weintraub noted, with shoppers in B.C. planning to spend around the same amount this season as they did last year.
“Ontario and Atlantic Canada are the ones taking the biggest hits, according to our study,” he said.
Meanwhile, the consumers who plan to spend the most this holiday season are high-income Canadians, Weintraub said, but even they are paring back, with about two-thirds of that earning group reporting they plan to “clamp down” as well.
“Although they have more money to spend, because they can afford a little bit more of an economic setback, it's going to be spread across the board,” he said.
The findings in Deloitte’s annual holiday retail outlook are based on a survey of more than 1,000 Canadian consumers across age groups, financial situations, and geographic regions. The survey was conducted online between the end of August and early September 2023.