Canadian consumers are showing renewed spending momentum heading into the 2026 holiday season, even as economic uncertainty and persistent price sensitivity continue to influence how and where they shop.

Salesforce is seeing Canadian consumers spend more and place more orders than they were a year ago, according to Caila Schwartz, Director of Industry Insights at Salesforce. The company’s latest data points to a potentially strong holiday period for Canadian retailers, although shoppers are expected to remain highly focused on value, promotions and convenience.

“We’re seeing that the Canadian consumer is feeling a lot more pessimistic about the state of the economy than what we’re seeing in the U.S.,” Schwartz told Retail Insider. “But what’s interesting is that we’re not seeing that have a direct impact on buying activity. The Canadian consumer is still shopping and still spending.”

Schwartz said Canadians are spending more than they were at this point last year, while order volumes have also increased through the summer. Earlier in the year, health and beauty performed particularly well, followed by strength in traditional back-to-school categories later in the summer, although she said no single category has defined the broader spending trend.

“We’re now starting to see a Canadian consumer that’s spending again,” she said. “We anticipate that will continue to remain strong through the fall, and we anticipate a pretty strong holiday performance.”

Salesforce has not yet released its formal Canadian holiday sales forecast, which Schwartz said is expected later in the fall.

The improving spending picture follows s11everal years in which inflation, higher borrowing costs and other economic pressures weighed heavily on Canadian households. Recent Canadian retail data has also shown periods of strengthening sales and e-commerce activity, although consumer conditions remain uneven heading into the final months of the year.

Canadian Shoppers Remain Highly Price Sensitive

Despite the spending momentum, Salesforce data shows 56 per cent of Canadian consumers say they are concentrating their spending on essentials, while 51 per cent say they are pulling back on splurge purchases. Another 35 per cent say they are trading down to lower-priced products.

Inflation and fuel prices remain among the economic issues consumers are most concerned about, according to Schwartz. Shoppers may be willing to spend, but they are becoming increasingly deliberate about when they make purchases and the value they expect in return.

That behaviour could intensify competition during Cyber Week. Black Friday falls on November 27 this year, giving retailers one additional shopping day between Black Friday and Christmas compared with 2025, but Schwartz said the selling period remains relatively compressed compared with some previous years.

Consumers are also beginning their holiday consideration process earlier, watching marketing campaigns, assessing promotions and planning purchases well before Cyber Week. Salesforce is nevertheless seeing more of the actual spending become concentrated around the major promotional period.

“Shoppers are paying attention earlier in the season, so they’re looking at the marketing messages, they’re anticipating the deals, they’re planning out their spend,” Schwartz said. “But we’re seeing more and more of the actual spending concentrate back into that Cyber Week period because ultimately shoppers want deals. They want a good price.”

Years of Black Friday promotions have conditioned consumers to expect substantial discounts, she added, making it increasingly difficult for retailers to persuade some shoppers to buy early.

Deal-Seeking Could Extend Beyond Cyber Monday

One of the more unusual trends identified by Salesforce illustrates how willing shoppers have become to wait.

Schwartz said the Tuesday immediately following Cyber Monday produced better average discounts last year than either Black Friday or Cyber Monday. She believes retailers were attempting to capture consumers who had made it through the traditional Cyber Week promotional period without completing their purchases.

“The Tuesday after Cyber Monday has kind of become a not-so-well-advertised discounting moment,” Schwartz said. “It had better discounts on average than what we saw on Black Friday and Cyber Monday.”

Schwartz expects continued price sensitivity to produce similar behaviour this year, potentially extending promotions as retailers attempt to convert hesitant customers. Retailers will be trying to generate transactions while protecting margins already under pressure from fulfilment, returns and other operating costs.

Free Shipping Adds Another Margin Challenge

Shipping could become an especially important part of that equation. Salesforce says free shipping is the top requested benefit among consumers and is expected to be a leading factor in where shoppers choose to buy during the holiday season.

Providing it is becoming more expensive. Schwartz said Salesforce expects brands to pay about seven per cent more in shipping costs this holiday season, increasing pressure on retailers to provide the convenience shoppers expect without absorbing the entire cost.

Higher thresholds for free shipping could become increasingly common. Retailers can also use their store networks to reduce fulfilment costs through buy-online-pick-up-in-store, ship-from-store and return-to-store options.

“I think there are opportunities to incentivize the shopper to choose those options,” Schwartz said. “I think we’ll see higher free-shipping thresholds just to offset those shipping costs.”

Loyalty programs could become another lever, with retailers offering shipping benefits to members rather than providing them universally.

Returns present a related challenge. Schwartz said return rates have been rising during recent holiday seasons, adding another cost retailers will be looking to manage. Some are turning to AI-powered product recommendations and guided shopping tools to help customers select the right products and reduce behaviours such as “bracketing,” where shoppers purchase several versions or sizes of an item with the intention of returning most of them.

Schwartz also expects retailers to continue adjusting return policies as part of broader efforts to protect margins.

Canadian Consumers Still Want to Shop in Stores

Despite the evolution of e-commerce and digital product discovery, physical retail is expected to remain central to the Canadian holiday shopping experience.

Salesforce research found that 77 per cent of consumers across the markets it tracks expect to shop in physical stores this holiday season. In Canada, that figure rises to 83 per cent.

“The store is still very alive and well,” Schwartz said.

The appeal includes established advantages of physical retail: customers can see and touch merchandise, discover products and leave immediately with their purchases. There is also an experiential component that appears to be resonating with younger consumers.

Schwartz said Salesforce is seeing interest among Gen Z and Millennial shoppers in some of the traditional rituals associated with Black Friday, including visiting stores early in the morning. For some younger shoppers who grew up with widespread e-commerce, the activity surrounding a major physical shopping event has become part of the attraction.

Physical and Digital Shopping Continue to Converge

The distinction between an online shopper and an in-store shopper is also becoming increasingly difficult to make.

Salesforce found that 42 per cent of shoppers have researched a product online before walking into a store, while roughly 80 per cent use their phones while shopping in physical retail environments. They may be comparing prices, researching merchandise, checking social media for inspiration, accessing loyalty programs or interacting with an AI assistant while inside a store.

“The boundaries between physical and digital shopping are very hazy for today’s modern consumer,” Schwartz said.

Salesforce consequently predicts that approximately 38 per cent of holiday retail spending this year will involve what it describes as hybrid sales, where both physical and digital touchpoints contribute to completing the purchase.

Product information, inventory availability, pricing, loyalty programs and fulfilment therefore need to work across channels as consumers move through their shopping journeys. With 83 per cent of Canadians expecting to shop in stores, the relationship between digital and physical retail could be particularly important in Canada this holiday season.

AI Adds Another Layer to Holiday Shopping

Artificial intelligence will also influence how consumers discover and evaluate products this holiday season.

Schwartz said roughly 11 to 12 per cent of Canadian shoppers now report turning to AI tools first in their buying journey, a substantial increase from last summer. Consumers are using services including ChatGPT, Gemini and Perplexity, along with AI assistants on social platforms, for product recommendations and to find pricing, promotions and coupons.

Retailers will also have to contend with increasing amounts of non-human website traffic as AI systems crawl product pages and collect information. Schwartz said managing that activity while keeping sites performing reliably will become particularly important during peak periods such as Cyber Week.

The broader implications of AI for product discovery and retail commerce extend beyond the holiday season as the technology becomes a larger part of consumer shopping behaviour.

A Growing Divide Among Canadian Consumers

The economic backdrop adds another complication. Schwartz said Salesforce is seeing signs of a deepening K-shaped economy, with higher-income consumers displaying greater optimism and purchasing power while lower- and middle-income households remain under heavier financial pressure.

Those differences have implications for how retailers approach customers during the holiday period. Product selection, pricing, promotions and marketing may need to reflect substantially different financial circumstances across consumer groups.

“Thinking about your personas, how you’re marketing to these specific customers, what types of journeys you’re putting them on and how you’re structuring your holiday marketing around that is going to be really important,” Schwartz said.

The divide helps explain the apparent contradiction in the Canadian consumer outlook. Retail spending can strengthen while significant numbers of households limit discretionary purchases, trade down and search aggressively for discounts.

For retailers, Holiday 2026 could bring stronger sales alongside a demanding competitive environment. Canadian shoppers are showing a willingness to spend, but they are also entering the season expecting value, convenient fulfilment and shopping experiences that move easily between digital and physical channels.

Salesforce’s current data suggests the demand will be there. The challenge for retailers will be capturing it while managing the cost of promotions, shipping, returns and fulfilment that could otherwise erode the benefit of stronger sales.

More from Retail Insider:

• More consumers turning to AI for online orders: Salesforce
• Canadian Black Friday sales rise 6% as AI-driven shopping and Buy Now Pay Later surge: Salesforce