Canada’s home sector is entering a new phase. Renovation demand remains resilient, disposable income is uneven but growing in key segments, and demographic shifts are redistributing spending power across regions and age cohorts. For retailers, the implications stretch far beyond hardware aisles.
In an interview with Retail Insider, the Retail Industry team at Environics Analytics (EA) outlined how online shopping behaviour, aging demographics, migration patterns, and patriotic purchasing are intersecting to reshape home improvement spending in Canada.
What began as holiday web and foot traffic analysis evolved into something much larger.
“It wasn’t our original intent,” said David Spira, Director of Account Management at Environics Analytics. “But it became the key discovery.”
That discovery was clear. The most active online mass merchandise shoppers are also disproportionately active in high-intensity renovation categories.
Online Mass Merch Shoppers Are Driving Renovation Signals
Spira explained that when Environics Analytics analyzed top web-oriented mass merchandise shoppers, above average indexesappeared across renovation-heavy categories, indicating these shoppers are likely to be spending more than the average Canadian household.
“We saw spikes in basement finishing, home security, HVAC, hard surface flooring, windows and doors, re-roofing, fences, and driveways,” he said. “A lot of what we saw was renovations to the current home. That’s where the spikes really showed up.”
Importantly, this pattern is not isolated to traditional home improvement banners. Similar behaviours appear among in-store electronics shoppers and sporting goods shoppers.
The takeaway for retailers is straightforward. Renovation intent is bleeding across categories. The customer buying a television or sporting equipment may also be planning a kitchen upgrade or basement project.
Who Is Spending: Affluent, Diverse, and Home-Focused
The behavioural data was layered with PRIZM segmentation and EA’s DemoStats and Social Values data to identify who these renovation-heavy consumers are.
Spira described them as well-educated homeowners in larger, culturally diverse households with average incomes around $150,000, roughly 17% above the national average. Within that group, households are about 1.5 times more likely to earn over $200,000.
“There’s a strong emphasis on home as a status symbol,” Spira said. “We also see appetite for storage, organization, lawn and garden, and time-saving upgrades.”
These consumers skew toward novelty and brand-forward cues. They want to be early adopters and respond to aesthetics and identity.
In other words, renovation is not just functional. It is expressive.
The Bifurcation Effect Is Real
The conversation quickly moved to a broader macro question. How can renovation demand remain strong while many Canadians feel financially stretched?
Spira framed it through the lens of a divided economy.
“There are still people who have money to spend, and they’re spending it,” he said. “Then there are others who don’t.”
Supporting that perspective, Environics Analytics data shows disposable income growth between Q2 2021 and Q2 2024 has been strongest among both the lowest and highest income quintiles.
This dual growth pattern reinforces the K-shaped narrative. Value-seeking behaviour is intensifying at one end, while premium renovation and refresh activity continues at the other.
Aggregate disposable income is projected to exceed $50 billion annually over the next three years, with more than $4 billion earmarked for home refresh spend.
The opportunity is material.
$6,812 Per Household: Where the Money Goes
The data quantifies the scale of spending. EA’s HouseholdSpend data shows the average Canadian household currently spends $6,812 annually across key home-related categories.
Of that, $4,335 is directed to home improvement including tools, materials, garden, and labour. Furniture accounts for $1,085, small appliances and décor for $957, and large appliances for $435.
Renovation-led categories still dominate the wallet. However, adjacent categories meaningfully benefit from refresh cycles.
Home improvement spending Canada remains renovation-heavy, but furniture and décor should not be overlooked as secondary beneficiaries.
Four Core Customer Groups
The research identifies four primary home improvement customer segments.
Older Families & Empty Nesters are typically 55+, earning around $175,000, largely homeowners in singles and semis, representing roughly 1.1 million households.
Middle-Aged Families are 45 to 64, earning approximately $135,000, representing about 1.6 million households.
Large Diverse Families are also 45 to 64 with incomes near $160,000, representing approximately 746,000 households.
The Younger Mix includes households under 45 earning about $145,000, often renters in semis, rows, and apartments, representing roughly 906,000 households.
The highest average spend sits with older families and empty nesters.
“We described it as a total home refresh,” Spira said. “That group was spending about 69% above the Canadian average.”
The younger mix, while often renters, demonstrates strong furniture and portable décor spending.
“They may not be renovating the structure,” Spira noted, “but they’re investing in what they can take with them.”
Aging in Place Is Accelerating Retrofits
A key structural driver remains aging in place.
“Aging in place is a real driver,” said Michael Scida, Vice President, Retail Business Development at Environics Analytics.
“We’re seeing people retrofit their current living arrangements to make them comfortable as they move into their senior years,” he said. “There’s money to spend on those projects.”
Those upgrades range from accessibility improvements to full-scale kitchen and bath renovations. With 20% of Canadians now over 65, this driver will remain significant.
DIY Versus DIFM: Labour Constraints Matter
Renovation demand is not purely about consumer intent. Labour availability plays a role.
Nationally, 29% of home improvements are completed by the homeowner, 18% by another household member, and 25% by contractors.
Complex jobs such as HVAC, roofing, windows, and kitchen remodels skew heavily toward professional installation.
“In rural settings, people are more inclined to do it themselves,” Scida said. “In urban settings, you’re more likely to hire a contractor.”
Retailers dependent on installation services must monitor contractor capacity just as closely as consumer confidence.
Migration, Secondary Markets, and Wealth Mobility
Demographics are shifting.
Annual immigration targets have been reduced by roughly 20% to 25%, and growth rates have slowed across regions, with some provinces recording population declines.
However, interprovincial migration remains active in select provinces, and affluent seniors continue moving to secondary markets.
“A lot of these households are taking their money with them,” Spira said. “Some are maintaining second homes. Others are selling in the city and making a secondary market their primary residence.”
This redistribution supports localized renovation demand in markets outside major CMAs.
The Rise of Patriotic Purchasing
Another emerging variable is patriotic purchasing.
A meaningful share of Canadians demonstrate strong affinity toward buying Canadian products, while others express national pride that may influence brand choice.
For hardware and home improvement retailers, this shift can influence visitation patterns and sourcing strategies, particularly where domestic manufacturing exists.
In categories such as lumber, tools, paint, and garden products, sourcing transparency may become a competitive lever.
Precision Over Blanket Expansion
The overarching strategic message is clear: understand where your best customer lives and activate accordingly.
Feature and display strategy, retail media, and optimized assortment should align with high-value trade areas and core segments.
Home improvement spending Canada is not disappearing. It is concentrating.
It is concentrating among Gen X in peak earning years. It is concentrating among aging homeowners investing in comfort. It is concentrating among affluent households who view the home as identity. It is redistributing geographically as Canadians move. For retailers, the opportunity remains significant. The winners will be those who combine behavioural data with regional insight, contractor capacity awareness, and sharper targeting across channels.
