Spending less, connecting more
Our 2022 holiday retail outlook shows Canadians are craving connection
and shared experiences this season.
As buying power shrinks across all income brackets, Canadians will be
looking for new ways to stretch their dollar this holiday. For some,
that means choosing new products, or investing more time to find the
best deals. Despite the challenges of this season, however, Canadians
are craving experiences that foster a sense of togetherness.
Economic uncertainty leads to reduced holiday spend
Economic uncertainty and household finances have left a mark on
consumers ahead of the holiday season.
Stretching their dollar
Canadians will shop early and hunt for deals to stretch their
holiday budget.
Brand loyalty may dip as prices rise
Rising prices and supply issues may impact consumer trust and brand
loyalty.
The cost of ethical shopping
Consumers want to buy goods that express their values—but tighter
budgets and skepticism are driving purchase choices.
Craving connection in-person
Canadian consumers will seek connection with friends, families, and
even fellow shoppers.
Economic uncertainty leads to reduced holiday spend
This year, Canadian consumers have 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. Seventy
percent of people say they’ll buy from retailers with the lowest
possible price and 69% say they’ll seek out sale items.
How’s the holiday budget being spent compared to last year?
$390
on gifts
-5% from last year
$120
on gift cards
-24% from last year
$239
on travel or vacation
-30% from last year
$132
on charitable donations
-14% from last year
Stretching their dollar
Canadian consumers will be trying to do more with less; 41% of
households have seen their finances take a hit this year. The same
proportion plan to only buy what their family needs and 38% percent
will search online to find coupons or better prices.
70%
Will buy from retailers with the lowest possible price
69%
Will search for items on sale
41%
Plan to only buy what their family needs
37%
Plan to start shopping earlier this year
Brand loyalty may dip as prices rise
76% of consumers expect retailers’ prices to be higher this year than
in 2021. 61% will shift to another brand if the product they want is
out of stock.
72%
Will shift brands if their preferred brand is too expensive
43%
will spend more time comparing prices
The cost of ethical shopping
47% of consumers said affordability concerns would impact their
willingness to pay for more sustainable and ethical products or
services. And more than a quarter said they don’t believe such
purchases will make much of a difference.
44%
Will pay up to 10% more for goods aligned with their values
46%
Won’t pay anything more, primarily due to unaffordability (47%) or
the belief that the products don’t have a meaningful impact on
sustainability (28%)
Craving connection in-person
After two years of pandemic-related restrictions, consumers are
looking for connection with family, friends, and even fellow shoppers.
Canadians plan to spend 56% of their holiday budget in-store, and 41%
are planning to gather with friends and family for holiday meals.
51%
Prefer to shop in-store this season
56%
Of the holiday budget will be spent in-store
Canadian consumers are living in a highly charged state of anxiety.
Empathy and understanding are what they need this 2022 holiday season.
Beyond sharpening prices, retailers can win hearts by offering moments
of respite by creating warm, judgment-free shopping experiences,
in-store and online.
Connect with us
Contact
Marty Weintraub
National Retail Leader
Marty leads the National Retail Consulting practice for Canada. For
the past 20 years, he has advised retail clients on developing and
implementing enterprise-wide retail transformation and operational
improvement programs that impact business processes, organization
designs and technology enablement. These programs result in his
clients realizing significant improvements to sales, margin, SG&A and
working capital in a world of retailing where traditional ways of
operating are no longer sufficient.