TORONTO, ON–The COVID-19 pandemic and with it the economic uncertainties will likely lead to less holiday spending this year. But Canadians are still planning to get into the festive spirit, though with other spending priorities. And they will do so with eCommerce but at the same time shop more locally and for Canadian products.
According to a recent Scotiabank survey more than half (56 percent) of Canadians said they plan to pull back their holiday spending this year because of other financial priorities. Most Canadians are being cautious with their spending (79 percent) and have made saving for an emergency a priority since the COVID-19 pandemic started (53 percent).
Though 39 percent of Canadians love to spend money on the holidays and won’t let the pandemic change that, 43 percent said finding extra money to spend this holiday season will be challenging. At the same time roughly 30 percent said they plan on spending more than usual on the holidays because of the extra money they were able to save during the pandemic.
Canadians who find themselves saving more money are using the extra cash to build up an emergency fund (61 percent), invest (34 percent) and pay down debt (29 percent). But they also want to save for a big purchase (26 percent).
“The pandemic has prompted many Canadians to reassess their personal finances and short-term priorities, shifting how they manage their money and planning for whatever uncertainties lay ahead,” said D’Arcy McDonald, senior vice president, deposits, investments, and payments at Scotiabank.
The Retail Council of Canada (RCC) said that the ongoing uncertainty brought on by the COVID-19 pandemic has made Canadians less structured in their approach to planning and budgeting for holiday shopping, According to the RCC’s annual Holiday Shopping Survey, a quarter of Canadians have begun their holiday shopping early because they are concerned about shipping delays. The pandemic has also put a spotlight on the challenges facing small community merchants.
The theme that emerges from this year’s research is the call to action of shop early, shop safe and shop local. Holiday 2020, it said, will likely set new benchmarks for years to come.
Here are the key findings from the RCC’s survey:
–Holiday spending intentions are lower, but 50 percent of Canadians still plan to spend about the same as last year: $693 in 2020 versus $792 in 2019, with 57 percent saying this is because there will be fewer get-togethers and, significantly, 55 percent saying it is because they have less money to spend.
–74 percent of Canadians’ budgets will be spent on others, while 26 percent will be spent on themselves. But 41 percent of those who will spend more on themselves this year will do so because they want to treat themselves.
–The product categories Canadians will be spending their money on is shifting. The number one category remains food, alcohol, candy or sweets (19 percent of overall spend). The second and third categories are, like last year, clothing and toys. But more money this year will be spent on personal electronics, health and personal care, books and music, sports equipment and furniture.
–Canadians are more concerned about being able to get the purchases they want on time and from a retailer that provides the safety measures and assurances consumers expect. 28 percent of Canadians also say the ability to buy online and pick-up in-store or curbside is more important this year than in the past.
–The shift to online is accelerating and as such it emphasizes the importance for retailers to provide seamless experiences across their selling channels. 58 percent of consumers will shop in store this year (a 14 percent decline over 2019) and 42 percent will shop online (an increase of 14 percent over 2019).
–More Canadians are doing research before they begin their holiday shopping (51 percent in 2020 versus 46 percent in 2019).
–Mobile will see a huge increase in usage for both researching and ordering across all product categories.
–At the same time shopping local is of growing importance for Canadians: 90 percent say buying from a retailer in Canada is key and 83 percent also agree that buying items made in Canada is important.
(Ed. Note: the closure of the Canada-U.S. border to nonessential journeys and strict quarantine requirements as a result of the COVID-19 pandemic may likely lead to more holiday shopping within Canada, particularly for communities that are within a short drive of U.S. cities and whose residents are used to cross-border shopping)
There are some key regional differences in spending, and in online and in-person shopping:
–Quebeckers plan to spend less this year than Canadians in the rest of the country ($532 versus $743). On average, Quebeckers have a higher proportion of their budget dedicated to gifts for themselves than residents in other provinces (29 percent of holiday budget).
–Ontarians are more likely to shop online than in-store than residents in several other provinces (46 percent of holiday budget versus 42 percent nationally), specifically with home deliveries (34 percent of holiday budgets versus 31 percent nationally).
–More Atlantic Canadians say they will still browse in-store this year versus residents in several other provinces (54 percent as compared with 39 percent nationally). They are also more likely to shop local to avoid shipping delays (59 percent to 47 percent nationally).
“Retailers are doing everything they can to ensure Canadians have the products they want and are offering great promotions so consumers can confidently and safely begin their holiday shopping earlier this year,” said Diane J. Brisebois, president and CEO, Retail Council of Canada. “Canadians, in turn, are increasingly appreciating the role they can play in helping to support retailers and businesses in Canada during this pandemic.”