Canadians are going to be stingier this year, curbing their holiday spend by 17% from last year.  

That’s according to Deloitte’s annual survey of more than 1,000 Canadian consumers across age groups, financial situations and geographic regions.

The insights reveal that Canadians are planning an average spend of $1,520, with the biggest cuts in non-gift electronics (down 55%), travel (down 30%) and non-gift clothing (down 27%).

This is contrary to some other early holiday forecasts. Other predictions have said Canadians would be looking for more deals to avoid cutting their budgets, finding money for gifts by scaling back on travel, or that the number of people looking to cut back spending would be offset by those looking to spend more.

The reason for Deloitte’s pessimism is a sense of doom and gloom about the state of the economy, a pandemic hangover and the fact that almost half (48%) of Canadians expect the economy to be worse in 2023. In addition, 41% say their household finances have worsened this year.

Grocery spending during the holidays is expected to be down too, despite more people planning to host formal meals this year than last (41% versus 35%).

Marty Weintraub, national retail leader for Deloitte, says inflation is a culprit, and people are really prioritizing where their precious dollars are going.

The steepest year-over-year spending declines are happening in the West and in the Maritimes, and according to Weintraub, the challenging employment conditions for the latter region are posing issues, adding an additional layer to the pressure of war, the threat of recession and supply chain issues.

Irrespective of geography, Canadians plan to shop early and hunt for deals to stretch their holiday budget: 37% will shop earlier this year, with 46% believing it will help them get better deals. They’ll shift to other brands if their preferred one is too expensive (72%), buy from retailers that sell at the lowest possible prices (70%) and seek out sale items (69%).

According to Weintraub, propensity to brand switch is higher when times are tough. Shoppers globally traded down during supply chain challenges, and developed a habit for it. For better or worse, trust and loyalty are being impacted by these factors, he says, noting that 61% of consumers are indicating they’ll try new brands if what they want is out of stock.

Canadian consumers seek connection with friends, families and even fellow shoppers: 51% of customers say they will favour shopping in-store this holiday season (up slightly from 49% last year), and those who will are planning to visit more stores: 5.9 on average, up from 5.3 last year but shy of pre-pandemic levels (6.4 in 2019).

Lastly, consumers want to buy goods that express their values, but a sizable number remain skeptical: 44% consumers are willing to pay up to 10% more for sustainable/ethical products or services. Others won’t pay more because of affordability issues (47%), challenges in identifying genuinely sustainable/ethical products (41%) or the belief that their purchase choices won’t have a meaningful impact (28%).