Canadian consumer spending intentions rose sharply in July 2025, reversing a steep decline seen earlier in the year. According to a new industry report by Stifel Nicolaus Canada Inc., 55 percent of survey respondents now expect to increase discretionary spending over the next 12 months. That figure represents a five-point gain from April and marks the second-highest level across nine survey periods.
The improvement is being driven primarily by high-income Canadians, particularly those earning more than $75,000 annually. These consumers showed stronger intent to spend across nearly every retail category, pointing to renewed confidence in their financial outlook. Analysts at Stifel suggest that the stabilization of the federal political landscape, particularly early approval of Prime Minister Mark Carney’s leadership, may be helping boost sentiment among this group.
Several Canadian retailers could benefit from the rebound according to Stifel, particularly those in apparel, pet supplies, travel, and big-ticket discretionary categories.
Apparel Spending Picks Up Steam
Spending intentions in clothing and apparel saw a notable turnaround. Fifty-one percent of Canadians surveyed plan to increase their spending on fashion in the year ahead, up three percentage points from April. Among high earners, 62 percent expressed intent to spend more, one of the highest figures seen since 2023.
The rebound was especially evident among female respondents, who posted one of the strongest results of the past nine survey cycles. This bodes well for brands such as Aritzia, Groupe Dynamite, and Gildan Activewear, all of which could benefit from increased demand in the months ahead.
Pet Category Remains Exceptionally Resilient
Spending on pets remains a bright spot. Seventy-six percent of respondents said they plan to spend more on pet food and accessories over the coming year, matching the strongest result recorded in the past nine surveys. The trend was most pronounced among women and higher-income households, both of which showed elevated spending intentions.
For Pet Valu, the data could signal a turnaround in same-store sales, which had faced pressure earlier this year. The consistency of consumer interest in this category continues to support growth opportunities for retailers targeting devoted pet owners.
Dollar Stores See Slower Growth
Although dollar stores remain a popular option, the July data suggest that their explosive growth may be levelling off. Seventy-three percent of Canadians said they would spend more in the channel, but that marks the second-lowest increase in five surveys. High-income shoppers, in particular, showed little appetite for further dollar store purchases.
This softening trend could be a headwind for Dollarama, which had enjoyed steady share gains during years of economic pressure. As confidence improves, consumers may be gravitating toward higher-quality or more specialized retailers.
Big-Ticket Categories Gaining Momentum
Somewhat unexpectedly, spending intentions for large discretionary purchases such as powersports vehicles have risen. Nine percent of respondents said they are very likely to purchase or upgrade items such as ATVs, motorcycles, or boats. That figure exceeds the four-year average and could indicate solid demand ahead for BRP, which manufactures a range of recreational vehicles.
Travel is also seeing a renewed boost. Fifty-seven percent of Canadians said they plan to fly for their next vacation, up from 55 percent in April. Among higher-income households, travel intentions jumped by nearly four percentage points. More respondents also indicated that airfare prices had no impact on their decision to travel, suggesting that pricing sensitivity is beginning to ease.
Mixed Signals in the Toy Market
Spending intentions for toys declined by two percentage points since April, though the headline figure masks a more complex picture. While lower-income respondents pulled back slightly, high-income Canadians showed a willingness to increase toy-related spending. Parents between the ages of 18 and 54 posted the strongest levels of intent, with more saying they were “very likely” to spend than “very unlikely.”
This could mean a flat to slightly positive outlook for Spin Master, the Toronto-based toymaker known for Paw Patrol, Bakugan, and other entertainment-linked properties.
Furniture and Appliance Spending Weakens
The outlook for furniture and appliance retailers appears more subdued. Only 53 percent of Canadians said they are likely to increase spending in this category, down three points from April. Among low-income respondents, the number dropped to 46 percent, the weakest reading of the past year. Male respondents also showed less intent to spend.
The data could signal challenges ahead for Leon’s Furniture and The Brick, both of which saw a decline in consumer preference. According to the survey, only 14 percent of Canadians now plan to buy their next piece of furniture from those two retailers, down five points from last year. At the same time, Costco and Amazon gained ground, with more respondents naming them as preferred destinations for furniture purchases.
Convenience Store Branding Shifts
Stifel’s research also explored preferences in the gasoline and convenience store space. The Circle K brand, operated by Alimentation Couche-Tard, saw improved brand recognition. Nine percent of respondents named it as their preferred fuel destination, more than double its showing in 2023.
Furthermore, more Canadians are entering convenience stores when fueling up. Twenty-three percent now say they enter the store most of the time, up from 15 percent in early 2023. This uptick may reflect a return of discretionary comfort or a greater reliance on convenience-based shopping.
Interestingly, 18 percent of respondents said they do not buy gasoline at all. While this could be linked in part to the growing adoption of electric vehicles, Stifel notes that the increase is too large to attribute to EV use alone.
Broader Implications for Retailers
Stifel’s July 2025 update paints a picture of cautious optimism. As high-income households regain confidence, spending is returning in categories that had softened earlier in the year. Apparel, travel, and pets are clear winners, while furniture and value-based channels like dollar stores may see flatter trends.
Retailers aligned with premium positioning, lifestyle branding, and differentiated experiences appear best positioned to benefit from the shift. While overall market sentiment remains mixed, the direction of travel suggests that discretionary spending is, at least for now, back in expansion mode.
