Majority of Canadians plan to spend less on non-essential goods

Fifty-five percent of Canadian consumers plan to decrease spending on non-essential goods and services, according to an April survey from EY.

The pandemic and the impact of isolation measures has seriously affected consumers, with The Conference Board of Canada reporting a record 41-point decline in their consumer confidence index in April.

Respondents in the EY survey noted that the way they shop was the number one change (87%) in consumption caused by the pandemic. Meanwhile, 70% said they changed the products they buy.

Though affordability (54%) and health and safety (40%) are prominent drivers of consumer behaviour, the social and environmental impact of products (47%) is a quickly rising area of concern. Consumers increasingly want to know how their products are made and sourced, and brands will have to align with these behavioural changes to remain relevant.

"Vague assurance won't be enough, either,” Ryan Beck, EY Canada consumer co-leader, said. “Businesses will need to invest in supply chain and data capabilities to provide transparency if they want to be perceived as authentic and win over consumer trust."

Consumers in the pandemic era, unsurprisingly, are seeking out seamless and safe experiences, with 55% turning to cashless payments and contactless purchasing and delivery.

“We're now seeing new preferences play out across the country as consumers ramp up online purchases, look for contactless transactions, and pay closer attention to the environmental impact of international supply chains,” Lokesh Chaudhry, EY Canada consumer co-leader, said.

When the survey was conducted in April, consumers were rather optimistic about the prospects for the resumption of shopping and leisure activities. Forty-eight percent expected a return to “normality” for shopping within weeks of reopening, and 41% expected normality for leisure activity within weeks of lifted restrictions.

Consumers were more sober about the prospects for travel, with 51% saying that it would take months for travel to return to normal, and 28% expecting it would take years.

Forty-six percent of respondents said that it would take years for their finances to return to normal. Millennials and Gen Zs reported particularly trying financial circumstances, with 41% living paycheque to paycheque.