Pandemic restrictions have certainly had a negative impact on spending as ongoing and recent restrictions have made it difficult for Canadian small businesses to operate.
However, data from 2021 by Moneris, Canada’s largest financial technology company that specializes in payment processing, demonstrates that as restrictions lift, Canadians’ spending and support for businesses increases.
As restrictions lift in 2022, spending will likely increase, as Canadians continue to prioritize health and wellness and spend on experiences they missed out on during lockdowns.
Peter Goldsztajn, Director of Corporate Data Analytics for Moneris, said 2021 was an interesting year in consumer spending.
“We did see some pretty substantial growths over 2020. When you talk about lockdowns, especially when you’re comparing them to 2020 they had significant impacts. Now I would say it’s much more focused on certain areas of the economy.
“There’s no surprise that restaurants and travel have been a common theme. On the positive side, things tend to rebound quite quickly. It’s pretty obvious. As soon as we lift restrictions people tend to hit the stores and try to get their fixes for going out as well as spending some money on the things they wouldn’t have otherwise.”
Goldsztajn said the household industry as well as the health and wellness industry benefited through the lockdowns because as people couldn’t go out and shop as much as they’d like they were buying things for their home and buying items for their personal fitness.
“These are areas that are still growing and it hasn’t changed with the exception that I think consumers are being a little bit more adjusting their behaviour with regards to concerns about supply chain issues,” he said.
Data by Moneris indicates that between January to March 2021 many Canadians continued to work from home and chose to spend their money on home office and general home upgrades. In the first quarter of 2021, Moneris saw a 52 per cent volume growth in the household spending category compared to March 2020. Health and wellness and outdoor recreation were also prioritized by Canadians in the early months of 2021.
Between April and June 2021, as reopening phases began to roll out across the country and stores and restaurants started to open their doors again, Moneris saw retail sales volumes increase by 15 per cent and restaurant sales volumes increase by 35 per cent compared to the second quarter of 2020. With travel restrictions still in place, Canadians spent their money on local recreation, services and hobbies.
Then between July and September 2021, the lift on travel restrictions caused a dramatic spike in plane ticket purchases (282 per cent) and hotel bookings increased by 45 per cent compared to the third quarter of 2020. Looser restrictions on get-togethers caused Canadians to make up for lost time spent with friends and family during lockdowns; significant spending increases were seen at: Amusement parks: +183 per cent; Bowling alleys: +57 per cent; Movie theatres: +406 per cent; Bands & orchestras: +166 per cent; Tourist attractions: +132 per cent; and Recreational sports leagues/camps: +82 per cent.
From October to December 2021, Moneris said spending on entertainment continued with an increase of 89 per cent compared to 2020 and sales at indoor recreational and entertainment facilities increased as the temperatures dropped.
“People have been spending money,” said Goldsztajn. “I can tell you that 2020 was below the normal no doubt about that but 2021 after March, in Alberta specifically, according to our data we’re actually seeing above the normal stats. There’s probably some element of pent-up demand. I can imagine that. People are also saving money and not commuting. Staying at home.
“But I do see substitutions. We’re basically at the same level or above in some industries. So people are still spending their money.”
Goldsztajn said that overall e-commerce has done well throughout the pandemic.
“I suspect as things open you’re going to see some more substitution around that. People will be heading to the stores more frequently. As we always say, shop local. You really want to support your local small businesses and if you can order directly from them or perhaps just go visit them in the store or curbside pick up and things like that.”