New data from Moneris suggests that Canadian consumers are not pulling back from spending altogether, but are becoming more deliberate in how and where they spend. Transaction data from the first quarter of 2026 shows a market that is stable on the surface, yet undergoing meaningful shifts beneath.
According to Moneris, which processes approximately one in three transactions in Canada, total spending in Q1 2026 declined by just 0.27% year-over-year, while average transaction size rose slightly by 0.18%. The result is a retail environment that remains steady overall, even as consumer sentiment weakens.
At the same time, survey data conducted with Angus Reid Institute highlights a more cautious outlook. Nearly half of Canadians believe the economy is struggling, while only 13% expect conditions to improve over the next six months. In addition, 43% say they plan to reduce spending on non-essential items, marking a notable increase in economic concern compared to mid-2025.
Essentials and Value Retail Continue to Gain
The data points to a clear shift toward essential categories and value-oriented retail formats. Grocery spending increased by approximately 3% year-over-year, while mass merchants saw a stronger gain of nearly 7%. These results indicate that consumers are prioritizing necessity purchases and seeking out value as they navigate economic uncertainty.
In contrast, several discretionary retail categories experienced declines. Apparel spending fell by about 2%, while household-related categories also declined by a similar margin. Department stores saw a more significant drop of 8%, reinforcing the ongoing challenges facing traditional mid-market retail formats.
This divergence highlights a growing polarization in the retail landscape, where value-driven and necessity-based retailers are outperforming more discretionary segments.
Experiential Spending Remains a Priority
Despite increased caution, Canadians continue to allocate spending toward experiences. Entertainment spending rose by 11% in the first quarter, with average transaction size increasing by 17%. This suggests that when consumers choose to spend, they are often prioritizing higher-value experiences.
Travel-related spending also showed resilience. Airline spending increased by 11%, although average transaction sizes declined, indicating that consumers may be opting for shorter trips or more budget-conscious travel options.
These trends align with a broader pattern seen in recent years, where experiences continue to capture a larger share of discretionary spending compared to physical goods.
Tourism Spending Patterns Shift
Foreign visitor spending in Canada remained relatively flat overall, declining by 1.81% year-over-year. However, the composition of that spending is changing.
International visitors increased their spending on entertainment by 21%, while reducing spending on hotels by 9%. At the same time, airline-related spending surged by 211%, suggesting a shift toward shorter stays or different travel patterns that prioritize activities over accommodation.
These changes may reflect evolving travel behaviours, including more frequent but shorter visits, as well as a greater emphasis on experiences during time spent in Canada.
Regional Performance Shows Mixed Results
Spending trends varied across the country, underscoring regional differences in economic conditions. Alberta and Saskatchewan both posted gains of approximately 1.24% in total spending, while Quebec saw a modest increase of 0.23%.
In contrast, Ontario experienced a decline of 0.57%, while British Columbia was down 0.86%. Manitoba recorded the largest regional decline at 2.14%.
These variations suggest that the Canadian spending trends story is not uniform across the country, with some regions demonstrating greater resilience than others.
Momentum Improves Through the Quarter
While overall quarterly results were flat, monthly data shows a gradual improvement as the quarter progressed. Spending declined by 2.35% in January, followed by a smaller decline of 0.63% in February, before turning positive in March with a 0.73% increase.
This trajectory indicates that consumer activity may be stabilizing, even as broader economic concerns persist.
Businesses Adapting to a More Selective Consumer
“The Moneris data, when combined with the Angus Reid survey, shows that Canadians haven’t stopped spending altogether, but are more focused and selective when it comes to discretionary spend,” said Sean McCormick, Vice President of Business Development, Data Services at Moneris.
He added that businesses can respond to this shift by focusing on customer experiences that emphasize value, quality, and convenience, while reducing friction in the purchasing process.
A More Focused Consumer Environment
The latest Moneris findings reinforce a broader shift in Canadian spending trends. Consumers remain active in the marketplace, but are making more intentional decisions about where their dollars go.
For retailers, this environment presents both challenges and opportunities. Value-oriented formats and essential categories are seeing steady demand, while discretionary segments face greater scrutiny. At the same time, continued strength in experiential spending highlights the importance of offering compelling reasons for consumers to engage.
As 2026 unfolds, the data suggests that Canadian consumers are not retreating, but are instead reshaping their spending habits in response to a more uncertain economic landscape.
