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Despite economic uncertainty, holiday spending is projected to rise by 3%, according to the latest Deloitte Canada holiday retail outlook.

The study, based on a survey of approximately 1,000 Canadian consumers, reveals that while spending on gifts and experiences will reportedly increase by 2% (+$18), consumers are cutting back in other discretionary categories (-8%, -$21).

The reason? Economic concerns remain high: nearly half (46%) expect the economy to worsen next year, up from 36% last year. Concerns about a potential recession have also increased (70% vs. 63% last year), and 80% are worried about the impact of tariffs on the Canadian economy.

“Buy Canadian” shopping behaviour is nuanced

According to Shaunna Conway, partner and national retail leader at Deloitte Canada, the data shows that support for buying Canadian remains strong among consumers: 73% of Canadians prefer to buy products that support local or Canadian businesses; 56% prefer to buy gifts from local or small businesses; 53% check where a product is made before purchasing most non-food products; 30% cite “local or Canadian owned” as a top retailer consideration.

“However, while the intention to ‘buy Canadian’ is robust, actual shopping behaviour is more nuanced,” Conway explains, with many respondents reporting they still choose to shop their favourite retailers and brands for gifts, including Amazon (70%), other mass merchants (68%) and warehouse clubs (49%).

“Many consumers still plan to shop at major value-driven retailers, global marketplaces and mass merchants, with value and deals often taking precedence over local origin – especially in the current economic climate,” Conway says.

Food and grocery categories typically see the strongest preference for local, as consumers associate these purchases with quality, freshness, and community support.

However, for gift categories, while 73% want to support local in general, only 56% prefer to buy local gifts.

Conway tells strategy, if a retailer can authentically celebrate local or Canadian roots, via product curation, storytelling, or community engagement they should absolutely do so. However, she points out, consumers are increasingly skeptical of “maple washing,” so authenticity is key.

The desire to support local is genuine, but with inflation and economic uncertainty top-of-mind, consumers are highly price-sensitive, Conway says, adding that value is non-negotiable because in today’s environment, value and price competitiveness are essential, even for local brands.

Deal-seeking

Consumers are also shopping earlier and across multiple channels to maximize value, according to the study, with 20% starting holiday shopping in October (up from 15% last year) and one-in-two planning to shop October promotions and Black Friday.

Deal-seeking behaviour may be driven by inflation concerns, according to the study, with 70% of consumers expecting higher prices this year (up from 65% last year), making it a leading factor influencing spending behaviour. According to Deloitte, this could be contributing to why eight in 10 shoppers are actively seeking the best deals, and why 52% choose private label products whenever possible.

According to Deloitte numbers, 63% of respondents indicate that loyalty programs influence where they choose to shop, while 48% are influenced by personalized offers.

The numbers also reveal that 55% of the holiday budgets will be spent in-store (vs. 42% online) – consistent year-over-year. Just over half (55%) of the budget will be spent in-store – higher for Baby Boomers (60%) than Millennials (53%).

More shoppers are turning to AI for holiday inspiration

Interest and engagement with AI is increasing: 63% of Canadians are familiar with AI, 27% are excited about its potential, and 50% have used AI in the past three months (up from 33% last year).

Gen Z Canadians are almost three times more likely to have used it recently than baby boomers (64% vs. 24%) and 33% of Gen Z Canadians use AI for product research compared to only 9% of baby boomers.

Overall, one-in-four believe retailers should use AI to assist with customer service or provide personalized product information.

Despite this growing adoption, 63% still express concerns and only 17% trust the technology, highlighting the fact that 70% of respondents continue to worry about data privacy and security concerns.

Ultimately, the Deloitte Canada holiday retail outlook study reminds brands and retailers that as Canadians head into the holidays, they appear to be balancing optimism with caution, making one thing clear: value will define the season.