Canadians are feeling the financial strain of inflation as the holiday season approaches, with average spending on holiday shopping expected to increase by 10 per cent to $1,478 according to Deloitte Canada’s 2024 retail outlook. Despite inflation cooling to 1.6 per cent, experts attribute the increase in spending to the impact of rising prices. Many Canadians are planning to rein in their shopping budgets in creative ways, such as giving gifts to fewer people or spending less per person compared to previous years. Financial pressures are expected to continue affecting holiday shopping this year, even with inflation on the decline.
To stay within budget, Canadians are turning to alternative gift-giving strategies such as gift cards, coupons, cashback sites, loyalty programs, rewards points, and second-hand items. The popularity of gift cards has increased, with more Canadians planning to spend at least $200 or more on gift cards this holiday season compared to last year. Gift cards are especially popular among older Canadians, while younger generations are opting for more affordable gift options and experiences over material items. Additionally, social media trends like “underconsumption core” are influencing people to consider DIY-homemade gifts or buying second-hand products to stretch their holiday budgets further.
Financial experts recommend setting a hard budget for holiday shopping, whether it’s a total budget or a per person budget, to avoid overspending. Tools like deals apps and timing holiday shopping during events like Black Friday can help shoppers find the best deals and stretch their dollars. Starting early can also help spread holiday spending over multiple months and take advantage of sales or discounts. Making a list of gift recipients and items can prevent splurging and overspending, while redeeming credit card rewards can help offset the impact of higher holiday prices.
Online marketplaces and social media channels can provide value and convenience for holiday shoppers looking to save money. However, financial well-being should not be sacrificed for the sake of holiday shopping or travel. It’s important to communicate with friends and family about scaling back or omitting the gift exchange if necessary, as others may be experiencing similar financial challenges. Ultimately, Canadians are finding ways to be flexible and budget-conscious during the holiday season, prioritizing thoughtful and meaningful gift-giving while staying within their financial means.
