Canadians expected to limit holiday spending amid inflation, economic uncertainty

A new report says Canadian residents are expected to spend less money this holiday season as high inflation and economic uncertainty continue.

Deloitte Canada says in their 2022 Holiday Retail Outlook that holiday spending is expected to fall 17 per cent to $1,520 per household.

The report says Canadians are planning to shop early and hunt for deals.

Retailers appear to be responding to early shopping patterns by rolling out Christmas-themed products earlier, with some even moving holiday promotions earlier in the fall.

Partner of Deloitte Canada, Marty Weintraub said that consumers were looking for a reason to celebrate last year as concerns over the pandemic settled. However that is not the case this year.

“This holiday season consumers are dealing with worries from every angle be it economic headwinds, rising interest rates, inflationary pressures, the ‘COVID hangover’, new and recurring diseases, geopolitical uncertainty, and more,” Weintraub said. “Across income brackets, consumers have seen their buying power shrink and they’ll be looking for ways to stretch their dollar.”

The biggest spending cuts will be seen in key categories including non-gift electronics, travel, and non-gift clothing.

READ MORE: Canadians are projected to spend $1,500 on holiday shopping

The study shows that consumers still want to make mindful purchases while dealing with tightening budgets.

Four in ten people are willing to pay more for sustainable and ethical products and more than half say they prefer to buy gifts that support small or local businesses.