Early Signs Point to a Strong Holiday Shopping Season in Canada Despite Economic Challenges

Date:

Share post:

Early indications show that despite all the economic headwinds, retailers in Canada could be experiencing a good holiday shopping season this year.

Data by Salesforce, in its annual Cyber Week Recap Report, said Black Friday sales were up two per cent from a year ago; retail sales grew by 11 per cent year-over-year on the Saturday and the Sunday; Cyber Monday sales grew by four per cent; and Cyber Week showed a five per cent hike.

Canadian retailers experienced the biggest surge Saturday and Sunday. While Cyber Monday sales grew overall four per cent year over year, as of 4 p.m. EST sales were still only showing one per cent growth indicating last-minute shopping into the evening hours.

Rob Garf. Photo: LinkedIn.

“The data highlights money-conscious consumers playing a game of ‘discount chicken’, as they patiently waited for the best deals of the week. Canadian shopper behaviour shows us Cyber Week isn’t about a single day of door crashers, but a season of deals that consumers are constantly monitoring from the palm of their hand,” said Salesforce.

“As Black Friday and Cyber Monday battle it out for the largest online shopping day, one thing is for sure, consumer spending remains resilient as they diligently search for – and buy – attractive deals,” said Rob Garf, VP and GM of Retail for Salesforce.

“Black Friday online sales performance exceeded any retail executive’s expectations. Retailers stepped up their discounting game and shoppers, in turn, clicked the buy button.

“Consumers who have been playing discount chicken should consider clicking the buy button now as retailers have decreased inventory levels to preserve capital and increase margins.”

Pre-Black Friday Sale at Bluenotes (Image: Dustin Fuhs)

Caila Schwartz, Director of Consumer Insights and Strategy for Retail and Consumer Goods for Salesforce, said there was a really strong Black Friday worldwide which was surprising considering some of the economic challenges today.

“We had really strong global growth. We had really strong growth in the U.S. Europe was actually driving a lot of the global growth and we also had really strong demand in Canada which has been seeing declines, especially throughout the year,” she said.

Schwartz said the double-digit year over year growth on the Saturday and Sunday is something we haven’t seen in a really long time.

“What was even more interesting about that data is that it was being driven by meaningful demand. So it wasn’t just because prices were higher. We actually saw order volumes increasing and what was happening was that discount rates were significantly higher than they were earlier in the week and they were also significantly higher than they were at the same time last year,” she said.

“What that meant was that consumers, especially in Canada, were actually getting lower prices than they were at the same time last year . . . This is what was really driving that demand. Consumers knew they weren’t getting good deals, they were seeing higher prices but when we got to the weekend and discount rates surged that’s when consumers in Canada started to buy. We saw that in Canada, we saw that in Europe and the U.S. In Canada what was actually interesting is that consumers were getting lower prices.

“It’s all about price sensitivity. Consumers have been handling higher prices for the last two years and I think discounting has been really soft. Prices are high. They’re not getting great deals. We saw a flurry of promotional activity in October and early November. The reality is that the discounts were not that great even though there was a lot of branding around early Cyber Week. Consumers didn’t actually get meaningfully significant discounts. What’s interesting about the shopper worldwide is that whether or not they’re keeping track of discounts they know whether or not a deal is a good deal. So on aggregate even though there was a lot of promotional activity the deals weren’t great and consumers knew that. So they weren’t buying. They were waiting for the deals and the deals came starting on Black Friday and continuing throughout the weekend and that’s when consumers bought.”

Black Friday Sales in Hudson’s Bay at CF Toronto Eaton Centre (Image: Dustin Fuhs)

Going forward, Schwartz said anything can happen. But her feeling is that discount rates might start to creep back up getting closer to the mid holiday season for shipping.

“After the shipping cutoff I think we’re going to see retailers really pushing consumers to buy online and pick up in store and I think they’re probably going to offer incentives around that,” she said. “I think that’s how we’ll see the rest of the season shape up.”

Meanwhile, over the Black Friday and Cyber Monday weekend, millions of Square and Afterpay sellers across the world set a record with 70 million transactions, up 14 per cent from last year.

Consumers continued to display diverse shopping habits as in-person shopping increased 15 per cent, while online cart sizes were 3.9 times higher than in-person, reinforcing the need for sellers to optimize their omnichannel strategy for the remainder of the holiday season. Also, nine per cent more businesses leveraged the power of omnichannel by attracting buyers both in-person and online.

Black Friday and Cyber Monday Metrics in Canada from Square and Afterpay:

  • Cities with the fastest growth of sales included Toronto, Vancouver, Calgary, Edmonton Winnipeg, Ottawa and Montreal;
  • In Canada, the peak minute of shopping occurred on Black Friday at 2:28 pm EST on November 24;
  • Black Friday and Cyber Monday weekend proved to be busy for businesses beyond traditional retail. According to Square data, restaurants experienced a 24 per cent increase in transactions, while 74 per cent more restaurants sent Black Friday and/or Cyber Monday discounts to promote their business; and
  • Square found 185 per cent more beauty and wellness sellers leaned into the shopping weekend by sending Black Friday and/or Cyber Monday discounts. Considering that in 2022, the most popular time for holiday appointments was December 20 – December 23, beauty sellers used the weekend to promote their services early in the holiday season.

“During the Black Friday and Cyber Monday shopping weekend, consumers turned out in droves to support their favorite businesses,” said Saumil Mehta, Head of Point of Sale and Omnichannel at Square. “We found that the holidays aren’t just for traditional retailers, as businesses across industries like restaurants and beauty lean into the major weekend. Given consumer sentiment has been positive around the holidays, and we know this weekend is often just the beginning, businesses should continue to expect an influx of shoppers, and be ready to meet them wherever they prefer to shop.”

Buy Now, Pay Later (BNPL) transactions through Afterpay increased 29 per cent in Canada, and Square sellers saw their Afterpay transactions grow 10 per cent. The fastest growing Afterpay item categories outside of fashion and beauty were home and department stores as consumers used BNPL for more choice and flexibility at checkout during the holidays.

Mario Toneguzzi
Mario Toneguzzi
Mario Toneguzzi, based in Calgary, has more than 40 years experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald covering sports, crime, politics, health, faith, city and breaking news, and business. He is the Senior News Editor with Retail Insider in addition to working as a freelance writer and consultant in communications and media relations/training. Mario was named as a RETHINK Retail Top Retail Expert in 2024.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

More From The Author

RECENT RETAIL INSIDER VIDEOS

Advertisment

Subscribe to the Newsletter

Subscribe

* indicates required

Related articles

Iconic Flo’s Diner in Toronto’s Yorkville Forced to Close After 33 Years Amid Landlord Dispute 

Retail Insider interviewed Flo’s co-owner who discusses the “heart wrenching” situation where he is being forced to close his business that began on Bellair Street in 1991.

Anatomy of a Leader: Teresa Spinelli, Owner of Alberta-Based Italian Centre Shop Ltd.

Spinelli discusses her leadership of the popular retailer which has expanded over the years, describing how she struggled to run the company at first and grew to love it.

Upscale Canadian Fashion Brand SMYTHE Expands with New Standalone Calgary Store [Interview/Photos]

It's the second store location for the Toronto-based brand, which is seeing success with its exclusive womenswear collections.

Toronto’s CF Sherway Gardens Hits Sales Milestone with Exciting Retail Growth and Future Plans [Interview]

The shopping centre is adding new retailers as sales per square foot hit an all-time high, with plans to re-tenant Nordstorm as foot traffic grows following Eataly's opening in the mall a few months ago.

ECS Coffee Opens Canada’s Largest Coffee and Espresso Equipment Gear Showroom and Retail Space in Toronto [Interview]

The new Etobicoke location is unique to Canada if not North America, according to its founder, with coffee roasting, equipment showroom, over 500 varieties of coffee, Youtube studio and various in-store experiences. He has plans to expand the concept nationally.

New Loblaws City Market Opens in Vancouver’s ‘The Post’ Building, Adding Grocery Competition to the Downtown Core [Podcast]

Craig and Lee discuss the opening of a new Loblaws City Market in downtown Vancouver's renovated Post building, and they explore its potential impact on local grocery shopping.

Loblaw Announces $2 Billion Investment in Canada for 2024 with Dozens of New Stores and 7,500 New Jobs [Expert Comment]

The retail behemoth will be growing substantially this year, following backlash over profits as inflation continues to impact Canadians.

Dubai-Based Asian Street Food Concept ‘Wok Boyz’ Expands into Canada with Plans for Multiple Locations [Interview]

The company's founder says the popular concept, with personalized meals, has an opportunity to grow substantially with its high-quality ingredients and theatrical flare, complete with fiery customer-facing woks.

Calgary Surge Basketball Team Launches Innovative Pop-Up at CF Chinook Centre to Boost Community Engagement [Interview]

The retail activation, which opened this month, is resulting in heavier foot traffic in a quieter part of the mall.

Upscale Pusateri’s Fine Foods to Close Yorkville Grocery Store in Toronto After 20 Years

The 5,500 square foot store opened to much fanfare in 2003, with valet parking, private chefs and pricey goods. 

Loblaw and Walmart Could be Forced to Adhere to Grocery Code of Conduct with Legislation [Op-Ed]

Sylvain Charlebois says that it's rare for all of Canada's political parties to agree, signalling a shift that could force grocers to comply amid record inflation.

Factory Direct to Shut All 14 Stores Amid Bankruptcy, Liquidation to Begin Saturday

The company, founded in 1995, is one of Canada’s largest privately owned discount retailers which struggled with declining sales and increasing costs following the pandemic.