Holiday spending could be in for a big rebound

After a tough 18 months, Deloitte predicts spending in most categories to meet or exceed pre-pandemic levels.

Holiday-spending

Canadians will be 31% more generous than last year, according to Deloitte Canada’s latest Holiday Retail Outlook report.

The professional service firm’s finding are based on surveying 1,000 Canadians spanning different ages and socioeconomic status and geography.

It estimates Canadians will each spend an average of $1,841 on the holidays, an increase of $436, or 31%, increase from 2020 levels. On average, Canadians will visit five stores and seven websites this holiday season.

This spend intent includes $569 on gifts and gift cards, an increase from $485 in 2019. Spending is expected to exceed or match pre-pandemic levels across categories, save for dining out, travel and alcohol.

For those shelling out more dollars this year, 46% report it’s to spoil friends and family after a challenging 18 months of lockdowns, while 21% report wanting to treat themselves to an indulgence.

The pandemic is still impacting behaviour for some shoppers, though, with 38% opting for a one-stop shop and 44% limiting their store browsing times.

Seven in ten survey respondents will favor stores with lenient return policies, compared with those opting for the lowest possible prices, at 56%. That said, shoppers opting to trial new brands are going to be swayed predominantly by price, at 63%, followed by free shipping at 51%. Another 38% will be enticed by unique or one-of-a-kind offerings, tied with greater selection (see, below)

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And while the majority of Canadians are expressing goodwill toward supporting local — 53% want to support such businesses this year — Amazon will still be the top shopping destination for consumers this year for 62% of Canadians, considerably ahead of mass merchants/retailers at 55% and grocers at 48%.

However, compared to last year’s online shopping boom, more Canadians are expecting to do their shopping in-store (55%) than online (41%), with 49% saying they still prefer physical stores for their holiday shopping needs. The Retail Council of Canada recently anticipated a similar return to in-store shopping, though it predicts a much wider gap.

And corroborating other studies, Deloitte says that 35% of Canadians plan to start their holiday shopping earlier before November, driven by supply chain issues, potential delivery delays and long lines and overcrowding in store. 

Lastly, Deloitte reports that charitable donations are also due for a major increase during this year’s season of giving, with Canadians expected to donate $153 each in 2021, a big spike from only $87 in 2019. This increase, according to the study, may reflect a desire among Canadian households that fared well during the pandemic to give back this holiday season.