Inflation will impact holiday shopping, but that might not mean spending less

A Rakuten survey finds loyalty programs and the circular economy are stretching budgets.

Canadians shoppers are feeling the economic pressure as they look ahead to their holiday spending, but instead of cutting their budgets, they are finding ways to be more mindful of their spending.

That’s according to a study by Rakuten, which conducted a survey of 1,000 Canadians with digital firm Ignite Labs.

It found that 82% of Canadians have at least one economic factor that will impact their holiday spending this year. Inflation more broadly was ranked highest at 61%, following by 53% citing rising grocery prices and 32% citing rising gas prices more specifically.

However, respondents still expect to spend an average of $600 this year, compared to $466 in 2020.

Claire Sweeney, VP of marketing at Rakuten Canada, says the survey’s results point to Canadians being smarter about spending, as opposed to slashing their holiday budgets.

For one, 78% of Canadians will time their shopping to sales, with 61% planning to shop during Black Friday (compared to 50% who said the same in 2020). To ensure they don’t miss any sales, 27% of Canadians say they have already begun holiday shopping, though 75% still plan to make their final purchases some time in December.

Shoppers are also more open to not buying new products from a store as gifts. This year, 44% expect to give at least one handmade gift, while 38% say they will purchase a gift second hand. One-third of Canadians plan to “re-gift” an item this year, a number that shoots up to 61% when looking just at those aged 18 to 24.

There has also been a rise in utilizing loyalty programs for holiday shopping, particularly those with some kind of cash-back offer: 62% of Canadians say they are utilizing these kinds of programs, compared to 49% pre-pandemic. That’s also the preferred reward option, with 63% saying they prefer cash back to points for holiday shopping. Regardless of reward type, loyalty programs are slightly more popular with those under 45 (68%) than those over 45 (57%).