Covid-19 depresses Canadians’ holiday budgets, pushes more online
Canadians are projected to tighten their holiday spending budgets and shift more shopping to online channels, according to Deloitte’s annual holiday retail outlook report. The consulting firm surveyed 1,000 Canadian consumers in September.
Deloitte expects that Canadians’ holiday spending will decrease by 18% in 2020, dropping from $1,706 in 2019 to $1,405 in 2020. Canadians cited a pessimistic outlook on the economy, higher food prices, and job losses as major factors for cutting back on spending.
One in three respondents said they would cut back on holiday spending, especially on travel and dining out, while expecting to spend more on groceries. Average holiday travel spending is slated to drop from $348 in 2019 to $104 in 2020, while holiday grocery spending will increase by $25 to $298 in 2020.
With the pandemic in its second wave, many Canadians expect to spend more time shopping online. Nearly half (47%), of Canadians said they have been shopping online more often since the pandemic hit. This trend will continue in the holiday season, with consumers planning to spend 44% of their budget online compared to 36% in 2019.
Amazon will win big this holiday season, according to Deloitte’s report, with 66% of Canadians saying they’ll use the e-commerce site to find and purchase items (up from 60% in 2019). Meanwhile, only 53% said they would head to physical stores to research and buy gifts, down from 69% in 2019.
Covid-19 is obviously weighing heavily on consumers’ shopping decisions this season. The report found that 64% of Canadians cite the risk of Covid-19 exposure as a reason to avoid shopping in stores. As such, the convenience of online shopping now holds the added allure of safety and peace of mind.
"Holiday shopping is not going to be viewed as a fun experience this season, but rather as a task to be completed as quickly, efficiently, and safely as possible," said Marty Weintraub, partner and retail leader at Deloitte Canada. "For many Canadians, this will simply mean shopping online, but bricks-and-mortar retailers haven't completely lost their attraction. Despite the fast-growing popularity of online shopping, those that can address consumers' concerns around protecting health and safety, and deliver a seamless, personalized, engaging customer experience that goes beyond expectations, will still bring customers in."
