Canadians to up holiday spending this season

Canadian shoppers are feeling more optimistic about the economy and their personal finances, and will increase holiday spending by 1.9% from last year to an average $1,593, according to PwC Canada’s annual Holiday Outlook report.

The survey of 1,302 Canadian consumers found that a quarter feel better about their personal finances than they did last year. Younger shoppers were even more optimistic, with 38% of Gen Z and 31% of millennials viewing their personal finances more positively.

Despite increasing signs that the global and Canadian economy is slowing, the report noted that Canadians are generally feeling positive about the economy. And although the household debt-to-income ratio continues to rise in Canada, fueled by a never-popping housing bubble, 80% of consumers said they plan to use their credit cards for holiday shopping, and only 17% are concerned about credit card debt.

As such, eight out of ten Canadians plan to spend the same or more this holiday season, with 25% saying they will spend more. Gen Z and millennials are even keener, with 42% and 35% expecting to spend more, respectively. 

"Retailers can expect a busy holiday season as Canadians continue to feel positive about the state of their personal finances," Myles Gooding, national retail leader at PwC Canada, said. "Canadians across the country and in different age groups will take advantage of deals offered in-store and online, creating a unique holiday shopping experience."

The majority of Canadians will focus their spending on family ($869), followed by themselves ($537), friends ($118), pets ($40), and others ($29). Men are expected to spend $1,820 this year, and women are expected to spend $1,384, on average.

Early November was tagged as the most popular time to start holiday shopping, while Black Friday was chosen by 38% as the best time to snag deals. Cross-border shopping is set to increase by 21% this year, with prices and deals (66%) selected as the top reason by respondents.

The PwC report found that Canadians plan to spend 41% of their shopping time online, up 4% from last year. Millennials will spend the most time online (55%), followed by Gen Z (50%). Home delivery is still the most popular delivery method (as opposed to store pickup, for example). Amazon Prime memberships are up 60% from last year, with 37% of Canadian households having one. The standard one-day and two-day shipping is pressuring other retailers to cut down on their own delivery times.

Canadians are not, however, abandoning in-store shopping, and PwC recommends physical retailers focus on upping the customer experience. The report found that more than a third of Canadians plan to make holiday shopping an event, going where there are also restaurants, movie theatres, and other entertainment facilities. Such "experience shopping" is especially popular among the younger cohorts.