Last year, consumers set a record by spending $11.8 billion online on Black Friday. This year, however, as economic concerns run high, holiday spending is expected to drop 14% heading into the biggest shopping day of the year on November 27, followed by Cyber Monday.
Despite the concern, Black Friday is shaping up to be the defining conversion moment this holiday season, with more than half (51%) of budgets expected to be spent by the end of the period, pointing to earlier sales and a fight to retain attention.
With price-conscious consumers increasingly spending from their couches on goods and services – and 42% of retail holiday spending expected to be spent online – capturing attention but also forecasting demand has become more difficult than ever, according to Deloitte Canada’s 2026 Holiday Retail Survey.
While consumers fight to conserve their dollars, often waiting an entire year to score a Black Friday deal, retailers face the threat of excess inventory and unpredictable markets. On the other hand, consumers are battling local ownership versus value proposition, especially in a fraught political climate.
Consumers are being cautious
Alex Hennick, President and CEO of A.D. Hennick & Associates, said consumers are becoming much more strategic about how and when they spend their money, especially with household budgets under pressure.
“Deloitte Canada recently reported that holiday spending is expected to fall to its lowest level since the survey began, which shows just how cautious consumers are becoming,” said Hennick.
“People still want to enjoy the holidays, but they’re being more selective about what they buy and how much they’re willing to pay. I expect discretionary purchases to face more pressure as shoppers prioritize gifts, necessities, and genuine value. It’s no longer just about whether something is on sale. Consumers are asking themselves, ‘Is this actually a good deal, and do I even need it?’.”
A.D. Hennick & Associates Inc. helps manufacturers, distributors, retailers, 3PLs, and insolvency professionals recover value from surplus inventory and distressed assets.
Practical steps for retailers
One of the biggest mistakes retailers make is purchasing inventory based on what they hope will sell rather than what consumers are actually buying, noted Hennick.
“Retailers need to forecast demand in real time, closely monitor sales, and compare their prices with what similar products are selling for in the market. The sooner they recognize shifts in consumer demand, the faster they can adjust their purchasing and pricing decisions,” he said.
“They also need to be realistic about inventory that isn’t moving. Sometimes accepting a smaller margin or even a loss is better than holding onto merchandise that’s tying up valuable cash. Cash flow is critical. The earlier retailers identify a problem and take action, the more options they’ll have.”
Change in traditional Black Friday period
Hennick said there really isn’t such a thing as a traditional Black Friday anymore.
“Black Friday used to be like a race where every retailer started at the same starting line, launching their biggest promotions on the same day. Now it’;s a free-for-all. A toy retailer might start its Black Friday sales on November 2, while an electronics retailer starts on November 15. Everyone is trying to get a head start and capture consumers’ limited holiday spending dollars before their competitors,” he explained.
“Black Friday has essentially become a shopping season rather than a single day. For retailers, simply advertising a Black Friday sale isn’t enough anymore. Consumers can compare prices in seconds, so discounts need to offer genuine value. Retailers need competitive pricing, compelling offers, and a seamless shopping experience, both online and in-store, to turn interest into actual sales.”
Supporting Canadian business
Canadians genuinely want to support Canadian-owned businesses, especially with everything happening around trade and tariffs. But with household budgets under pressure, there’s only so much extra consumers are willing or able to spend, said Hennick.
“Someone might prefer to support a Canadian retailer, but if they can buy the same product elsewhere at a significantly lower price, that’s going to influence their decision. For smaller independent retailers, the key is focusing on what makes them different. Whether it’s exceptional customer service, unique products, or stronger customer relationships, they need to give people a compelling reason to choose them.”
Biggest financial risks of 2027
Hennick said one of the biggest risks heading into 2027 is retailers carrying too much inventory while operating costs remain high and consumer spending remains unpredictable.
“Retailers can’t assume that because something sold well last year, it will sell just as well next year. They need to forecast demand carefully, react quickly to changing purchasing habits, and avoid tying up too much cash in inventory,” he said.
“We see it all the time in our business. Companies hold onto excess inventory hoping to recover what they paid for it, but in many cases, the longer it sits, the less valuable it becomes.
“Ultimately, a successful holiday season isn’t just about how much you sell. It’s about how much money you actually make and the financial position you’re in heading into the new year.”
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