Retail Insider has released Q3 2026 Consumer Behaviour / Retail Economy: Spending Holds Up as Shoppers Become More Selective, authored by Retail Insider founder and publisher Craig Patterson. The report examines why continued spending does not mean Canadian households are buying in the same way or under the same financial conditions.
The report examines Canadian purchasing habits, household finances, shopping channels and the economic conditions affecting retailers and landlords. It draws on Retail Insider coverage, surveys, company results and government data discussed during Q3, while distinguishing reporting dates from the periods the evidence actually measures.
Retail Insider Reports provide executive-level analysis of the sectors and business issues shaping Canadian retail. The collection is available through the Retail Insider Report Hub, bringing sector reporting and broader industry research together in one place.
General Themes
- Headline sales need context: Dollar growth can exceed growth in merchandise volumes and conceal substantial differences between categories.
- Households have different room to spend: Younger consumers and families with children reported greater reliance on credit for essentials in the research reviewed.
- Value extends beyond price: Quality, service, convenience and availability can influence purchases alongside affordability.
- Loyalty does not guarantee the whole basket: Customers can stay with a retailer while changing products, buying promotions or taking individual purchases elsewhere.
- Shopping missions shape demand: Immediate availability gives stores an advantage, but missing inventory can send customers to competitors.
Retail Insider Coverage
Household financial pressure varied considerably. The MNP Consumer Debt Index released in July found that 46 per cent of respondents were $200 or less from being unable to meet monthly bills and debt obligations, even as the overall confidence index improved. An Equifax survey of 1,532 respondents found that 29 per cent were using more credit for essentials than a year earlier. The figure reached 42 per cent among families with children, compared with 24 per cent among households without children, demonstrating why a single consumer-confidence reading cannot describe every customer.
The report also considers more severe financial stress without confusing its timing. Consumer insolvencies totalled 37,523 in Q2, up 6.9 per cent year over year and the highest quarterly count since 2009. That was not a population-adjusted record, and it should not be described as a Q3 insolvency total. These findings sit alongside Equifax’s result that 56 per cent expected to pay their credit-card balances in full each month.
Value seeking also requires a more precise interpretation than simply buying cheaper goods. BCG research showed higher-income households spending two to four times as much as lower-income households in some major categories, while quality and service remained relevant to purchase decisions. A July Stifel survey of 300 Canadian adults found that 57 per cent expected to increase discretionary spending over the following year. Those are intentions from a relatively small survey, not completed transactions, but they complicate an exclusively defensive view of consumer demand.
Grocery research illustrates how retailers can retain customers while losing parts of their baskets. A Milesopedia study found that 71.1 per cent were comparing prices more often and 39.1 per cent were buying more private label, while only 9.6 per cent had changed their preferred retailer. Its 203 participants came from a newsletter and Facebook community, approximately 83 per cent were in Quebec, and respondents were particularly familiar with loyalty programs. The findings are not a national switching measure. Loblaw’s positive food traffic and basket growth and Empire’s reported full-service share gains likewise do not support a universal shift toward discount grocery.
The shopping mission can matter as much as the channel. RCC and Leger research involving 2,014 Canadian shoppers and follow-up focus groups found that 58 per cent completed their purchase in a store. Among task-driven shoppers, 70 per cent purchased in-store and 71 per cent took the product home that day. With 37 per cent saying they switch retailers when an item is unavailable, stock accuracy and dependable fulfilment become direct sales considerations.
AI adds another discovery route without yet displacing the established shopping journey. In the same RCC and Leger research, 11 per cent had used AI during shopping research but only 1 per cent began there. Separate coverage described consumers asking questions about intended uses and problems rather than starting with named products. Accurate specifications, sizing and availability therefore matter across digital channels, although studies using different definitions of adoption cannot be combined into a reliable growth rate.
Broader Industry Coverage
Category results explain why national averages need closer examination. Statistics Canada reported July retail sales of $73.7 billion, down 0.7 per cent from June but up 5.1 per cent annually, compared with 1.7 per cent annual volume growth. Health and personal care sales increased 12.2 per cent year over year, while the combined furniture, home furnishings, electronics and appliances category declined 4.9 per cent. Pet Valu’s approximately flat Q2 same-store sales concealed weaker transactions and larger baskets, while Cineplex’s attendance growth coexisted with softer location-based entertainment results.
Lower inflation does not restore earlier price levels. Grocery inflation slowed to 2.8 per cent annually in August, below the 3.0 per cent headline rate, but grocery prices remained approximately 29 per cent above August 2021. Households still face that accumulated increase when deciding how to allocate their income. A slower rate of increase can therefore coexist with persistent pressure to compare prices and alter purchases.
Editor’s Take
The practical test for retailers and landlords is whether revenue growth reflects stronger underlying demand. Transactions, units, basket composition, private-label penetration and promotional dependence can reveal changes that customer retention alone misses. A tenant can report rising sales while becoming more reliant on higher-income shoppers or selling more discounted merchandise. In-stock performance belongs in the same assessment because unavailable products give existing customers a reason to buy elsewhere.
Employment is an important variable in the outlook. Canada lost 42,000 jobs in August after gains totalling 181,000 from April through July, while unemployment held at 6.4 per cent. One decline does not establish sustained deterioration, just as anticipated supply-chain costs do not prove higher shelf prices have already arrived. Empire reported minimal tariff effects at its September call, while the report notes that energy and fertilizer pressures can take months to reach consumers.
The commercially useful question is which purchases a retailer keeps and why. Customers can remain loyal while reducing discretionary additions, waiting for promotions or moving individual categories elsewhere. Price matters, but availability, service and product quality influence those decisions too. Measuring the composition of demand gives operators a more useful basis for action than treating every resilient sales total as evidence of a financially comfortable customer.
Conclusion
Read the full Q3 2026 Consumer Behaviour / Retail Economy: Spending Holds Up as Shoppers Become More Selective for the analysis of household finances, shopping missions and retail performance. It explains how changes in individual purchases can alter a retailer’s economics even when the customer relationship appears stable.
The report and the wider quarterly collection are available through the Retail Insider Report Hub. The hub brings together analysis of retail sectors, consumer behaviour and the businesses supporting the industry.
