Despite economic uncertainties, Canadian consumers are gearing up for the 2023 holiday season with some resilience and determination, according to a recent survey conducted by PwC Canada.
This year’s edition of PwC’s Canadian holiday outlook revealed that 76 per cent of respondents plan to maintain or increase their holiday spending compared to the previous year. The average expected spending per Canadian consumer is expected to grow 13 per cent over the previous year.
Some key findings of the survey include:
- 61 per cent of consumers plan to visit a physical store for gift ideas, with younger shoppers (Gen Z) leading;
- 43 per cent of consumers say knowledgeable in-store employees will be one of their top sources for product recommendations;
- Canadians are traveling and on the move again: The average Canadian spend on travel this year will be the highest we’ve seen since 2019. The increase is seen primarily due to planned travel expenditures, which are up 31 per cent in Canada and 12 per cent in the US from 2022. Consumers are resuming their pre-pandemic travel patterns and spending the holidays with friends and family, as well as fulfilling their pent-up demand for trips abroad;
- Post pandemic shopping trends: With COVID and safety concerns not top of mind, in-store shopping will make a come-back, with 63 per cent of consumers planning in-store purchases, especially for gift ideas. Online marketplaces, notably Amazon, will continue to dominate e-commerce, with 91 per cent of respondents planning to shop on the platform;
- Gen X and Gen Z will lead the spending surge, with an increase of 29 per cent and 26 per cent, respectively;
- 25 per cent of Gen Z and Millennial consumers will use emerging retail technology such as Virtual Reality / Augmented Reality / AI for holiday shopping.
“Canadians are approaching the holiday season with optimism. The survey reveals shifting generational spending patterns. These changes reflect the resilience and adaptability of Canadian consumers in navigating evolving economic landscapes,” said Myles Gooding, National Consumer Markets Leader & Global Consumer Markets Advisory Leader at PwC Canada.
“What strikes me when we walk through this data is travel is back in a very big way and we’re starting to see that come to fruition . . . That appears to be the big story. I think on the gift giving side, we’re looking at a four per cent increase over last year which coincidentally is right on target with the NRF (National Retail Federation) in the U.S. with a four per cent increase as well.
“But when you look at the data what that really says is there’s probably going to be some winners and probably going to be some losers. We already see categories out there like DYI are struggling. General merchandise retailers in the U.S. have already kind offered some hedging their bets, managing expectation comments around this data not being as big as we’d like it to be. I think for the most part most of them are looking to come out of this pretty respectable.”
Gooding said dining and entertainment will likely increase only by about one per cent.
Despite some economic challenges, he said retail spending has remained resilient.
“I think when it comes to the holidays, people will open up their wallets,” added Gooding.
“The interest rates right now are really affecting the Millennial demographic the most. Married with kids. They have mortgages. Some of them are starting to come due. So tighter in those households. Gen Z probably not quite so much. They’re probably got some promotion in their career. And Gen X are now taking place of the Baby Boomers in being at the peak of their careers and spending a fair amount of money on things like travel and gift giving as well.”
Gooding said the one thing that retailers can really pay attention to that consumers are focusing on three things – quality, value and experience.
“When you at certain retailers, some of the reports are showing some are doing really well, it’s centred around those three pillars. Even if the product is a little bit more expensive, if it’s demonstrating quality and you’re getting an experience, you’re probably going to be doing pretty well. So that’s probably going to be the key differentiator between those winners and losers as to how this holiday season unfolds,” he said.