Canadian parents are grappling with increased back-to-school expenses this year, despite purchasing fewer items.
According to a recent survey conducted by NerdWallet Canada, the average projected spending for back-to-school shopping has surged to $743 per family, a significant increase from $524 in the previous year. This uptick comes even as 23% of parents report buying fewer items due to inflationary pressures.
The findings align with a separate study by the Retail Council of Canada, which indicates that 85.7% of Canadian consumers are either maintaining or increasing their back-to-school expenditures compared to last year. The NerdWallet survey further highlights that while 92% of parents will engage in back-to-school shopping, a concerning 18% may incur debt from these purchases.
Interestingly, Canada’s latest Consumer Price Index (CPI) data presents a nuanced picture. While prices in the recreation, education, and reading category have seen a slight year-over-year decrease of 0.2% for July, the clothing and footwear category has experienced a more substantial decline of 2.7% over the same period.
To mitigate rising costs, Canadian consumers are adopting various strategies. The NerdWallet survey reveals that 53% of respondents plan to take advantage of sales, 26% will use coupons, and 20% intend to purchase some secondhand items. Additionally, 65% of those surveyed plan to use credit cards for their purchases, potentially benefiting from cash back or other incentives. However, financial experts caution that this approach could lead to higher costs if the resulting bills are not paid in full or on time.
The Retail Council of Canada’s survey also sheds light on evolving shopping preferences. In a reversal of pandemic-era trends, 71.6% of respondents now prefer in-store shopping for back-to-school items. Furthermore, Canadian consumers appear to be planning their purchases earlier this year, with 40% intending to shop between two and four weeks before the school term begins – a 10% increase from the previous year.
This shift in consumer behaviour comes against the backdrop of Canada’s cooling inflation rate, which slowed to 2.5% in July – the lowest since March 2021. The moderation in shelter inflation, a key economic pressure point, has also contributed to this trend, with both rent and mortgage interest costs experiencing downward pressures.
