‘Tis the season to be flexible and budget-conscious.
The weather might be cooling but Canadians still feeling the heat from years of inflation are looking to spread the holiday cheer this year without breaking the bank.
Average spending on holiday shopping is expected to increase by 10 per cent to $1,478, according to Deloitte Canada’s 2024 retail outlook that was released this week.
Most Canadians – 85 per cent – surveyed recently by NerdWallet Canada said they intend to give gifts this holiday season and they plan to spend roughly $700 on average on them. That represents a 6.4 per cent increase compared with last year’s planned spending.
Inflation, which has cooled to 1.6 per cent, is the key driver of why Canadians anticipate spending more this holiday season, experts say, as polling shows many have creative plans to rein in their shopping.
Barry Choi, a personal finance expert at Money We Have, said even though inflation is down, prices are still up compared with previous years.
“I think we’ll see more people being tighter with their budgets and capping how much they’re spending on gifts,” he told Global News in an interview.
Financial pressures are going to continue affecting holiday shopping this year and despite inflation coming down, that won’t necessarily “ease the consciousness of the consumer,” said Marty Weintraub, national retail leader at Deloitte Canada.
How are Canadians shopping for the holidays?
A quarter (26 per cent) of Canadians surveyed by NerdWallet in September said they will be giving gifts to fewer people this year due to inflation and a third (34 per cent) said they will be spending less per person compared with past years.
“We’re seeing a lot more flexibility, I think, in the way that people are approaching the holiday shopping,” said Shannon Terrell, lead writer and spokesperson for NerdWallet Canada.
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Surveys show that Canadians will be turning to gift cards, coupons, cashback sites, loyalty programs, rewards points and even second-hand items when shopping for themselves or others.
“It would not surprise me if more people shopped the secondary market to get unique gifts at a good price,” Choi said.
More than a quarter (28 per cent) of Canadians said in a survey conducted by Givex last month that they plan to spend at least $200 or more on gifts cards this holiday season – up from 20 per cent last year.
Gift cards are more popular among older Canadians, with millennials, gen X and baby boomers ranking them as their top or second-most-common thing to gift, a PwC Canada survey showed.
Choi said gift cards can often be a good solution for people struggling with choices.
“Purchasing gift cards is an easy way to manage your budget and keep the stress of holiday shopping down,” he said.
Terrell said the popularity of gift cards has a lot to do with the rise of online shopping.
“Sometimes giving a gift card or an e-gift card that can be sent electronically, it’s convenient for the person purchasing the gift, but it’s also convenient for the person who receives it.”
Younger generations are leaning into flexible gift-giving strategies, Terrell said, with gen Z and millennial shoppers more likely to opt for different types of gifts that are more affordable.
With the “underconsumption core” trend taking social media by storm in recent months, Terrell said many people might even go for DIY-homemade gifts and prioritize shared experiences over material things.
The PwC poll found that 28 per cent will buy second-hand or refurbished products to stretch their holiday budget further.
To trim expenses, self-giving where people buy something for themselves is also going down, Weintraub said.
How to cut your holiday expenses
There are several ways that shoppers can avoid breaking the bank when shopping for the holidays.
Choi said that “setting a hard budget,” whether that be the total budget or a per person budget, is the way to go, as well as trimming back on how many people gifts are being bought for.
Deals apps, like Flipp, can come in handy to help compare prices between different retailers, he said.
Timing your holiday shopping can also help and Choi advises starting during Black Friday so people can make the most of good deals.
This year’s Black Friday is expected to be one of the busiest simply because of the search for value and wanting to stretch dollars, Weintraub said. On top of that there are five fewer shopping days between Black Friday and Christmas, which puts more pressure on retailers and consumers, he said.
“There’ll be a real big battleground in retail, online and in stores for those dollars in those precious days between Black Friday and Christmas.”
Terrell said starting early can spread the holiday spending over multiple months and help capitalize on potential sales or deals.
Making a list is helpful to avoid splurging or overspending, she said. And for people who collect credit card rewards, now may be the ideal time of the year to redeem them to “really help take away some of the sting from those raised holiday prices.”
Online marketplaces and even social media channels are good options if you’re looking for both value and convenience, Weintraub said.
But at the end of the day, “we don’t need to sacrifice our financial well-being for the sake of holiday shopping or travel,” Terrell said.
“If you need to scale back or omit the gift exchange entirely, perhaps now is the time to say so, because a friend or family member may be in the same position as you,” she added.
© 2024 Global News, a division of Corus Entertainment Inc.