Deloitte's report shows Canadians searching for deals amid rising costs
Deloitte Canada's 2024 Holiday Retail Outlook – The search for value: A season of cautious spending predicts that holiday spending in Canada will rise by 10 percent this year, reaching $1,478.
This increase marks a reversal from last year’s decline. However, despite this rebound, spending remains below recent levels, including $1,520 in 2022 and $1,706 in 2019.
The survey notes that this rise in spending does not necessarily indicate renewed consumer optimism.
More than half of Canadians (55 percent) remain concerned about housing costs and rent increases, paying for holiday gifts (35 percent), and credit card debt (31 percent). Despite these worries, fewer Canadians expect the economy to worsen in 2025 compared to last year.
Inflation continues to play a significant role in holiday spending, with two-thirds of consumers expecting higher prices this season.
Marty Weintraub, partner and national retail leader at Deloitte Canada, noted that “This year’s holiday season will be marked by a critical search for the best deals, both in-store and online.”
He added that the retail environment will be increasingly competitive, with Canadians facing a wide range of options and a shortened shopping season.
The report also outlines several other key trends. Travel spending is predicted to increase by 20 percent, and charitable donations are set to rise by 35 percent. However, spending on non-gift apparel is expected to see the largest decline.
Consumers are also leaning more towards online shopping, with 43 percent planning to allocate a significant portion of their holiday budget to digital purchases.
Amazon remains a dominant platform, with 71 percent of consumers planning to shop there, and Prime membership has reached an all-time high.
Younger consumers, particularly those aged 18-34, are showing interest in emerging eCommerce platforms like Temu, Shein, and Alibaba. Many are even open to shopping directly through social media platforms such as Instagram and TikTok.
Overall, 30 percent of Canadians are exploring these newer platforms as part of their holiday shopping.
The timing of holiday spending is also shifting, with Canadians planning to spend 67 percent of their holiday budget on or after Black Friday. This year, retailers will have a shorter window to capture sales, as Black Friday falls five days later than usual, leaving them with just under four competitive weeks.
Data breaches are another concern for consumers, with one in four Canadians having experienced a breach at a retailer. As a result, 60 percent of those affected have either stopped shopping at that retailer or reduced their purchases.
GenAI, a newer technology, has yet to gain widespread trust, with six in ten consumers expressing skepticism. Only 19 percent are excited about its potential, while 18 percent think retailers should adopt its use.
Weintraub stressed that in a time when discretionary spending is likely to remain constrained, retailers must focus on meeting consumer expectations for value.
“It will be important for retailers to pay attention to longer-term consumer trends such as new digital shopping destinations and social commerce. Effectively adapting to these changing consumer behaviours and attitudes will be vital as retailers look forward to focusing on growth after a challenging few years,” he said.
