Poll: Christmas spending

In any year, the holiday season is a pivotal, make-or-break time for many businesses. But this year, while retailers are working even harder to entice consumers to get in the spending spirit, a number of factors are conspiring to keep Canadian shoppers at bay.

First, there is the general consumer malaise: Many people have already been struggling with the high cost of living after unusually high inflation and interest-rate hikes in recent years. In addition, the continuing Canada Post strike may be discouraging those who like to check off their “nice” lists online, for fear that gifts may not arrive in time.

Others may be waiting for better deals: this week’s Black Friday discount bonanza falls later in the calendar than usual this year. And for certain items affected by the federal government’s recent announcement of a moratorium on sales taxes – which does not begin until Dec. 14 – shoppers have even more incentive to delay their purchases.

In short, price-sensitive shoppers are looking for deals, putting pressure on businesses to compete.

“Retailers in Canada are nervous about this holiday season,” said Marty Weintraub, national retail consulting leader at Deloitte Canada. He added: “I do think it’s going to be a pretty hot post-Black Friday shopping season, and retailers are going to have to fight extra hard to get their share.”

In its annual Holiday Retail Outlook study, Deloitte predicted that Canadians will on average spend $1,478 this festive season. That represents a 10-per-cent increase compared with last year, but it is still well below prepandemic spending.

And people are picking and choosing where their money goes: while Deloitte expects spending on travel and charitable giving to grow significantly, the report predicts gift spending to rise just 4 per cent – only modestly outpacing inflation.

“Things cost more. So it’s not necessarily buying more stuff, they just have to spend more money to get said stuff,” Mr. Weintraub said.

Retailers have been responding by advertising their discounts – and starting early. While “early Black Friday” sales are nothing new, stores are attempting to send the message that customers do not have to wait until the real Black Friday on Nov. 29 to find the best promotions.

Montreal-based outdoor e-commerce retailer Altitude Sports, for example, is advertising Black Friday pricing on more than 3,600 products on its website, with a price-matching guarantee that applies if a customer finds a better price – whether on a competitor’s site or Altitude’s own site – through a later deal.

This is important because Altitude’s customer service line has been fielding questions about whether deeper discounts are still to come.

“People are calling to know, what will the deals be on Black Friday? Should I wait?” Altitude’s co-chief executive officer, Maxime Dubois, said in an interview. He added that “for retailers, it adds pressure, because people have been trained to know that Black Friday is the time of year when they should act.”

Retailers do not want shoppers to wait, for a couple of reasons. First, healthy sales volumes earlier in the season give companies more certainty, knowing that the holidays are going to go well, Mr. Dubois said. And having a “smoother sales curve” is more cost-efficient than having to process a massive surge of orders during the few days between Black Friday and Cyber Monday, he added.

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