Canadians projected to spend more money this holiday season

Canadians will spend $1,563 on average this holiday season, an increase of 3.7% over last year’s purchasing. PwC Canada’s 2018 Holiday Outlook report relates that 60% of Canadians will shop between Black Friday and December 25.

According to the annual PwC Canada report, travel continues to make up the largest proportion of holiday spending (46%). Gifts follow close behind at 41%, while entertainment (including dining out) accounts for 13% of the holiday spend.

Increased holiday spending, which is expected to go up from an average of $1,507 in 2017 to $1,563 this year, means that consumer confidence is doing fairly well. Despite factors like high interest rates, rising debt levels, and caustic trade negotiations, Canadians will still see a modest rise in their gift-giving this season. Overall, 58% of those surveyed said that they would spend the same, while 25% said that they would spend more this season. Meanwhile, millennials were slightly more optimistic than the average, with 38% planning to spend more than the year before.

Interestingly, despite rising debt levels in Canada, more than 74% of Canadians will use credit cards to purchase gifts, with only 19% concerned about credit card debt. The high usage, rather than for purely credit needs, could additionally reflect credit cards' centrality in online purchasing, or to rack up points and rewards on big spending. The low worry, on the other hand, could reflect confidence that the bill will be paid off before high interest rates kick in.

PwC projects that more people will shop in-store this season rather than online. 63% of Canadians consider brick-and-mortar stores as their primary holiday shopping channel. On the other hand, 51% of millennials consider online shopping first, which is close to the attitude of the US consumers overall (50%).

Meanwhile, men will spend more than women, increasing their spending by 7% to $1,752. The average Canadian woman will spend $1,385 this season.

Millennial moms, however, will be the biggest spenders this season, shelling out an average $2,264; the second-heaviest spenders will be the Greatest Generation (age 72+), at $2,239. Amazon Prime members (23% of Canadians) are projected to spend $2,026.

In the battle of gift cards versus physical items, gift cards have been gaining in popularity in recent years. However, millennials are more inclined to want to buy – and receive – physical items rather than gift cards. 49% of millennials plan to buy physical items for others compared to 43% overall, while only 21% of millennials intend to buy gift cards for others versus 38% of people overall.

And not to forget the furry members of the family, PwC expects pet owners to spend an average of $65 on their pets over the holidays.

In other PwC Canada news, the firm recently opened the application period for its Vision to Reality Awards (V2R) which recognize innovative and creative Canadian organizations. The application period runs until December 21, 2018.