Canadians spending less on gifts (and donations) for the 2023 holiday season – MoneySense

Canadians are already planning to spend less, according to Deloitte Canada’s 2023 Holiday Retail Outlook. This is an annual forecast for retail businesses—but this year, there’s little for them to feel jolly about. According to a survey of 1,000 Canadians, we plan to spend an average of $1,347 over the 2023 holiday season. That’s down 11% from 2022’s forecast of $1,520 and nearly 27% from 2021’s forecast of $1,841. What are we cutting back on this year? Charitable donations (-40%), gifts (-18%) and gift cards (-14%).

Canadians are looking for the best holiday deals—and we’ll switch brands if necessary

Canadians always love getting deals, but we’re going to spend carefully this year and focus even harder on value, says Marty Weintraub, national retail leader at Deloitte Canada. “We’re seeing the money shift to what we call ‘extreme value.’ The top reasons for picking a retailer are: number one, reasonable prices, and number two, value for money,” he says, adding that shoppers plan to spend more at mass merchant retailers and warehouse membership clubs this year.

Other notable findings from the survey, conducted in September:

• One in three Canadians are worried about how they will pay for gifts. 
• 48% of Canadians intend to buy only what their family needs this season—up from 41% in 2022 and 35% in 2021.
• 76% of us expect prices to be higher this year, and 73% of us think retailers are raising prices unfairly. 
• We’ve become a nation of bargain hunters: 77% of us plan to shop around for the best deals, and 71% of us will switch brands if our preferred one is too pricey. 
• We don’t mind putting in the legwork—45% of us will visit multiple stores in the same area to get what we’re looking for. Overall, we’ll visit an average of 16.5 stores and websites (up 37% from 2022). 
• To afford holiday purchases, 24% of us will postpone travel plans, and 23% will cut back on our grocery budgets. 

On the brighter side, some Canadians are still finding room in their budgets to indulge a little and to spend according to their values. According to the survey findings: 

• 26% of us will treat ourselves to an experience such as a concert, sports event, trip or spa day.
• More than half of us (55%), especially younger adults and women, are willing to spend more for products and services that are sustainable.
• We’re planning to spend 11% more money on travel this holiday season than in 2022.

Despite tighter budgets this holiday season, we’re spending more on travel

How is travel spending rising when we’re cutting costs elsewhere? “Post-pandemic, we still have some revenge travel happening this holiday season,” says Weintraub. “Last December, if you went away, it was a gong show at the airport and with the airlines. As a result, some people said, ‘Not for me, I’ll do it later.’ Some of that’s coming back this year, but in the context of inflation hitting travel as well.” 

Weintraub himself is taking his family on a trip over the holidays, and he expects to spend more than he would have last year. “I want to provide an experience for my family rather than buy things, and I want to go because I didn’t get to do it in the past couple of years,” he says. “I’m going to borrow from Peter to pay Pauline—take it out of one pocket and put [it] in another—and I’m willing to pay for more it.” 

Canadians are worried about debt, high interest and job loss

Deloitte’s findings echo the results of other surveys. In mid-October, the MNP Consumer Debt Index shared that more Canadians are struggling with debt, high interest rates and concerns about job loss. Half of respondents reported that they are $200 or less from being unable to meet their financial obligations.

“There is no mystery as to what is causing Canadians’ bleak debt outlook: it’s getting increasingly difficult to make ends meet,” Grant Bazian, MNP’s president, said in a press release. “Facing a combination of rising debt-carrying costs, living expenses and concern over the potential for continued interest rate and price hikes, many Canadians are stretched uncomfortably close to broke.”