Consumers compensating for higher costs with fewer non-essentials, more work hours
TORONTO; Nov. 15, 2022 – Canadians are looking forward to the holiday season but will be trimming their spending ahead of time to make the most of it, according to the 2022 Holiday Shopping Report from Accenture (NYSE: CAN).
The 11th annual survey found Canadians will be saving money in multiple ways in the run-up to the holidays, including cutting back on non-essentials such as entertainment subscriptions and eating at restaurants (69 per cent), spending less on travel or hotel stays (63 per cent), and even having fewer decorative lights to lower their utility bills (61 per cent).
More than two-thirds of Canadians say they will even be cutting back on gifts to their extended family and friends (67 per cent) or not exchanging them altogether (57 per cent).
Many others say they’ll take on a side hustle (41 per cent), such as babysitting, dog walking, selling items on a marketplace, or that they’ll increase their work hours (39 per cent) to earn additional income before the holidays.
Overall, Canadians expect to spend $643 this season, an increase from last year’s average spend of $635 but still less than the pre-pandemic spending level of $721 in 2019.
“As we near the holiday season, consumers have tightened their wallets and are making adjustments to their everyday spending while finding new ways to boost their income,” said Robin Sahota, managing director at Accenture and the leader of its retail practice in Canada. “While consumers look forward to yet another shopping season, success for retailers will come from being empathetic to consumer challenges and focusing on delivering enhanced in-store experiences, meeting rising consumer demand for more efficient shipping and doing right by their employees.”
Despite looking for ways to save money before the holidays, the majority of Canadians, or 59 per cent, say they expect to spend the same amount of money on the holidays, as they did in 2021 – and 16 per cent expect to spend more.
Gen Z (ages 18-24) and Young Millennials (ages 25-31) are most likely to say they’ll spend more (26 per cent and 29 per cent, respectively), while Baby Boomers (ages 56-69) and those over 70 are least likely (at just eight per cent).
Of those planning to spend more, nearly half (40 per cent) say it is because they want to treat their loved ones, or treat themselves (39 per cent). Young Millennials (55 per cent) and men (47 per cent) are most likely to want to treat themselves, compared to just 14 per cent of Boomers and 30 per cent of women. However, one-third of all consumers surveyed say rising prices leave them no choice but to spend more.
Perhaps unsurprisingly, many Canadians (25 per cent), anticipate spending less this year compared with than last – with 54 per cent saying they can’t afford to.