Canadians are craving connection this holiday season

The 2022 retail holiday survey by Deloitte indicates Canadians are craving connection and shared experiences this year with plans to increasingly visit stores and host family gatherings.

“Recent holiday seasons have seen Canadian consumers cycle between cautious optimism and concern. This year, they’ve been exposed to a seemingly endless cycle of negative news, including economic uncertainty, high inflation, rising interest rates, geopolitical upheaval, general “pandemic hangover,” new or resurgent diseases, and more,” said the report.

Any Lane

“It will be hard for Canadians to find reasons for optimism when there is so much ambiguity. Across income brackets, consumers have seen their buying power shrink. They’ll be looking for ways to stretch their dollars this holiday season. For some, that may mean choosing new products; for others, it might mean spending more time looking for the
best deals.

“While some will strive to make purchases that reflect their sustainability and/or ethical values, others question whether they can afford to do so or whether they feel equipped to identify products that are genuinely sustainable and/or ethical.”

Key insights from the report include:

• Consumers trim holiday spending amid economic uncertainty and other worries: Almost half (48%) of Canadians expect the economy to be worse in 2023, and four in 10 (41%) have seen their household finances worsen this year. Overall holiday spending will fall 17% this year, to $1,520, with the biggest drops in non-gift electronics (-55%), travel (-30%), and non-gift clothing (-27%);
• Canadians will shop early and hunt for deals to stretch their holiday budget: One in three (37%) will shop earlier this year, with 46% believing it will help them get better deals. They’ll shift to other brands if their preferred one is too expensive (72%), buy from retailers that sell at the lowest possible prices (70%), and seek out sale items (69%);
• Rising prices and supply chain issues may impact consumer trust and brand loyalty: 76% of shoppers expect higher prices this season; 68% question if retailers are raising them more than needed, a concern creating tensions across industries. And, supply chain challenges have trained consumers to find substitutes, with 61% indicating they’ll try new brands if what they want is out of stock;
• Consumers want to buy goods that express their values—but some are skeptical: Four in 10 are willing to pay up to 10% more for sustainable/ethical products or services. Others won’t pay more because of affordability issues (47%), challenges in identifying genuinely sustainable/ethical products (41%), or the belief that their purchase choices won’t have a meaningful impact (28%);
• Canadians seek connection with friends, families, even fellow shoppers: 51% of customers say they will favour shopping in-store this holiday season (up slightly from 49% last year), and those who will are planning to visit more stores: 5.9 on average, up from 5.3 last year but shy of pre-pandemic levels (6.4 in 2019). And more are planning to host formal meals this year than last (41% versus 35%).