Canadian consumers are expected to cut holiday spending by 14 per cent this year to $1,305, the lowest level since Deloitte Canada began tracking seasonal expenditures, as economic uncertainty and concerns about tariffs prompt shoppers to prioritize value.
The professional services firm’s 2026 Holiday Retail Outlook projects a five per cent decline in spending on gifts and gift cards, alongside sharper reductions in holiday entertaining and experiences. The findings suggest retailers will face more price-conscious consumers and greater competition for discretionary spending during the holiday shopping season.
Deloitte’s survey found that 83 per cent of Canadians are concerned about the impact of tariffs on prices and the broader economy, while 78 per cent plan to actively seek discounts, promotions and sales to stay within their budgets.
“Canadians are not cancelling the holiday season, but economic uncertainty is influencing their spending decisions, making them far more discerning,” said Shaunna Conway, Partner and National Retail Leader at Deloitte Canada. “This shift is creating more price-conscious consumers, and retailers that offer clear, compelling value propositions will be best positioned to earn a place in shoppers’ holiday baskets this year.”
Spending declines as economic concerns mount
The report forecasts total holiday spending of $1,305, down from $1,521 in 2025. Spending on holiday entertaining, including alcohol, cannabis and groceries, is expected to fall 22 per cent, while expenditures on experiences such as travel, vacations and dining out are projected to decline 20 per cent.
Despite the overall pullback, gifts, groceries and travel remain the largest planned spending categories. Nearly one-third of Canadians, or 29 per cent, intend to spend less this year, reflecting a broader effort to manage household budgets.
The survey also points to deteriorating consumer confidence. About 34 per cent of respondents said their household finances were worse than a year earlier, compared with 32 per cent in the previous survey. Meanwhile, 45 per cent expect the economy to weaken by 2027, and 74 per cent expressed concern about a possible recession, up from 70 per cent last year.
Price expectations could further complicate retailers’ efforts to attract customers. Nearly eight in 10 Canadians, or 79 per cent, expect holiday prices to be higher than in 2025, compared with 70 per cent last year. At the same time, 63 per cent believe retailers are raising prices more than necessary.
Deloitte’s findings suggest consumer perceptions of fairness and transparency will be important alongside the prices retailers offer. While 77 per cent of respondents prioritize reasonable prices and value when choosing a retailer, 45 per cent said Canadian or local ownership matters to their shopping decisions. However, 35 per cent would not pay a premium for products based solely on local ownership.
Retailers face fragmented shopping journeys
Consumers are also planning to visit more retailers and digital destinations as they compare products and prices. Respondents expect to use an average of 16 stores and online destinations when shopping for gifts, up from 14 last year. Consumers aged 35 to 44 expect to visit an average of 23 retailers.
The timing of promotions could be particularly important for retailers seeking to convert that research into sales. More than half of planned holiday budgets, or 51 per cent, are expected to be spent by the end of the Black Friday and Cyber Monday shopping period.
The report points to early-season offers, product availability and a smooth shopping experience as factors retailers will need to address to capture demand during that period.
Traditional channels remain central to shopping plans. Deloitte expects 55 per cent of holiday spending to take place in stores, compared with 42 per cent online. Amazon and Google remain the leading sources of holiday shopping research, cited by 65 per cent and 64 per cent of respondents, respectively.
Artificial intelligence gains ground in product discovery
Artificial intelligence is becoming a more common tool for holiday shopping, particularly for finding gift ideas, comparing prices and discovering deals. Nearly four in 10 Canadians, or 39 per cent, plan to use AI for holiday shopping, up from 25 per cent in 2025.
However, consumers remain cautious about handing purchasing decisions to the technology. Only 19 per cent said they would be comfortable allowing AI to make purchases on their behalf.
“AI is becoming an important discovery tool for Canadians, but they continue to rely on established retail platforms for completing purchases,” said Conway. “Retailers should consider AI as a way to enhance decision-making and create more relevant, personalized experiences. It’s a powerful asset they can leverage to show up and stand out during the most competitive retail season of the year. ”
Use of AI for gift inspiration varies by age. Half of consumers aged 18 to 34 said they would use the technology for that purpose, compared with 18 per cent of those aged 65 and older.
Consumer concerns about personal information also present a challenge for retailers seeking to personalize shopping experiences. Although 46 per cent of respondents were willing to provide personal information in exchange for promotions, 68 per cent expressed concern about data misuse or unclear data practices.
The findings point to a potential tension between consumers’ interest in tailored offers and their expectations for privacy and control over personal information.
Deloitte conducted the survey from Aug. 28 to Sept. 4, polling Canadian consumers across age groups, financial circumstances and regions. All spending figures are in Canadian dollars.
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