Canadians to spend 30% less this holiday season

A PwC forecast shows a generational gap in spending plans and big declines in how much people are buying for themselves.

Shopping online

With more than half of Canadians saying the pandemic will have a negative effect on their spending capabilities this holiday season, PwC Canada has found that they will be spending considerably less, according to its latest report.

This year’s holiday outlook from the business consultancy is based on a survey of 1,000 Canadians across Vancouver Calgary, Toronto and Montreal.

The report predicts Canadians will spend $1,104 dollars on average, a net decrease of 30.7% from 2019′s $1,593. That is partially thanks to downward trends in Gen X and Boomer spending, groups that plan to spend an average of $1,058 this year, compared to $1,216 for millennials and Gen Z.

While spending on gifts is largely holding steady, that is coming with a 49% dip in the average amount people plan to spend on themselves. The other areas of cutbacks mirror categories most hit by the pandemic. Travel is taking it on the chin, with expected spending down to $308 dollars this year, compared with $743 in 2019. Canadians are also planning to spend less on entertainment: $166 in 2020, compared to $204 in 2019.

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Among the report’s other key findings is that despite the fact that nearly 60% of consumers will do at least some shopping in-store, that will be outweighed by online channels, as consumers prioritize their health and safety, and also convenience. According to PwC, 80% of Canadians want to purchase items as easily as possible, while 74% plan to go somewhere close and convenient.

This will be reflected in big gains in curbside pickup, an increasingly popular option this year, with 33% of shoppers choosing this touchpoint for online purchases, compared to 13% last year.

“Successful retailers will be those who adapt to our quickly changing business environment and understand what a more digital world means for how they interact with consumers,” says Myles Gooding, PwC Canada’s national retail leader.

Finally, the report finds online cross-border shopping is gaining traction, a phenomenon PwC refers to as “the rise of the global shopper.”

Cross-border shoppers are driven primarily by price (for 80% of consumers choosing to shop this way), as well as by product range (64%) and availability (62%), factors which are outweighing the higher shipping costs associated with international retailers. Footwear, apparel and accessories (48% of consumers) and electronics and audio equipment (43%) dominate products on cross-border shopping lists.