Nov. 2, 2009 – According to a survey by Deloitte, fifty-one per cent of
Canadians plan to spend the same amount this holiday season as they
have the past two years.
Nov. 2, 2009 – According to a survey by Deloitte, fifty-one per cent of Canadians plan
to spend the same amount this holiday season as they have the past two
years. Fourty-four per cent of
respondents plan to spend less than they did last year – up by 3 per cent over
last year’s survey, which confirms little change in consumers’ spending
intentions. The major difference for Canadian consumers, and ultimately
retailers this holiday season will be reflected in how and where
holiday dollars are spent, as consumers focus less on durable goods and
more on experience-based gifts, such as spa getaways and theatre
This holiday season, consumers only plan to allocate 26 per cent of their
holiday spending on gifts for others. The rest of their purchases will
be on items for themselves and their families: 21 per cent on home
improvements, which could be attributed to the 2009 federal home
improvement tax credit; socializing and entertaining will account for
another 28 per cent. The remaining spending goes to nongift clothing (9 per cent),
home/holiday furnishings (8 per cent) and charitable donations (8 per cent).
“All year long, retailers have been reducing inventories, and it’s
quite possible that the most desired items will be sold out early in
the holiday season,” says Brent Houlden, national retail practice
leader at Deloitte. “Based on this year’s results, retailers should
brace for a wave of shoppers later in December, as Canadians will delay
purchases until there are substantial markdowns,” concludes Houlden.
Canadian retailers to compete with their American counterparts
Consumer confidence has risen steadily in Canada for the last six
months, according to the Conference Board of Canada Consumer Confidence
Index, which reached the 90-mark in September, a level not seen since
April 2008. By contrast, the US Conference Board Consumer Confidence
Index has been hovering around the 50-mark for the last five months.
Despite this gap between the two levels, Canadian retailers will have
to work hard to drive holiday sales while facing intense competition
from U.S. retailers.
As the Canadian dollar flirts with parity and some American
retailers advertise deeply discounted prices directly to Canadians, we
can expect a reopening of cross-border shopping. In the Greater
Vancouver Area, for example, more than 30 per cent of respondents indicated
they were likely to cross the border for their holiday shopping.
Regional differences impact spending
Regional differences will likely play a role in how retailers do
this coming holiday season. Job security, always a factor in shoppers'
spending decisions, varies significantly from coast to coast, with 81 per cent
of respondents feeling at least somewhat secure in the Greater
Vancouver and Greater Toronto Areas, 89 per cent in the Greater Montreal Area
and 93 per cent in Atlantic Canada.
However, some regional differences about holiday spending may offset
economic factors, as Torontonians plan to spend slightly more than the
national average while Montrealers plan to spend 25 per cent less. Of note,
Atlantic Canadians plan to allocate more of their holiday spending to
gifts (33 per cent) than other Canadians and more than any other category.
Toronto and Montreal residents plan to allocate (25 per cent and 28 per cent
respectively) more to home improvements than other Canadians and more
than any other category. Vancouver residents plan to allocate 32% of
their holiday spending to socializing and entertaining.
Strategic social media use still emerging among retailers and younger shoppers
Although a growing number of respondents (20 per cent) will be using social
media for their shopping this season, the full potential of this new
medium is yet to be seen. In fact, the top four reasons given for using
social media tools are, in order: researching gift ideas (62 per cent), finding
discounts, coupons and sale information (55 per cent), checking with friends or
family on gifts they want (45 per cent), and researching product reviews and
recommendations (44 per cent).
Top gifts for 2009
- Gift certificates/cards
- CDs or DVDs
- Traditional toys
- Money (cash or cheque)
- Cosmetics and fragrances
- Computer/video games
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