Financial pressures could impact Canadians’ holiday spending: survey

New survey data suggests that Canadians are planning on reining in their holiday spending this year.

Deloitte’s fifth annual holiday retail outlook survey has found that Canadians are expected to spend 11 per cent less for the holiday season than compared to last year, for an average of $1,347 per person.

The findings show that growing financial pressures may be the cause for this drop. Two-thirds of respondents said they’re concerned about a recession, while 55 per cent are worried about rent and mortgage increases.

“You add all those things together which are obviously grounded in inflation, economic risk, and whatnot, they’re feeling extreme pressure,” said Marty Weintraub, National Retail Leader with Deloitte.

It’s not just the holiday season that may suffer from these fears, as Weintraub says Halloween also falls under the umbrella of the holiday spending season.

“Halloween, I would say, is sort of encompassed in the holiday shopping season because when we ask ‘ how much are you going to spend?’ in essentially what we call the ‘holiday season’ which starts early, mid-October right through to January and Boxing Week,” he explained.

Weintraub points out that in an effort to cut back on spending, Canadians may be changing where they shop. The survey found that consumers are planning to shop at 37 per cent more stores in an effort to save, with 11 per cent planning to buy more from dollar stores.

“We’re going to see a lot of that spend shift to what I call some the ‘off-price retail.’ So think dollar stores, off-price department stores, essentially where there’s a value proposition that resonates with the current climate,” he told CityNews.

Some retailers may suffer from this shift, Weintraub says, as nearly three-quarters of Canadians feel like stores are raising their prices unfairly.

“If you’re stuck kind of in the middle, you don’t stand for a very strong value position on price, those retailers are going to suffer,” he said.

Weintraub adds that for many retailers, the holiday season is a “make or break” time for their finances, which could be impacted if the survey’s findings ring true.

“When we have this kind of pressure, we’re expecting some retailers to come out of January potentially not in the best financial state,” he said.

While for-profit retailers may struggle to meet their bottom line, a similar issue may come up for donation drives for charities. Weintraub says Canadians are planning on reducing their charitable donations by up to 40 per cent this season.

“You think of all the fundraising organizations that it’s a make-it-or-break-it season for them too, just like it is for retail. There’s a lot of fundraising that happens right now for the next two, three months,” he noted.

The outlier in the survey is the amount that Canadians are willing to spend on travel, which is up 11 per cent compared to last year.

The findings from Deloitte’s report come from a survey of more than 1,000 Canadian consumers that range across geographic areas, demographics, and financial situations.