Pattie Lovett-Reid: Canadians are simplifying their financial lives
(AlenaPaulus / iStock)
TORONTO -- We have counted on the consumer for so long to prop up the Canadian economy and that has been a good thing for so many small business owners. However, the reality is hitting consumers after a forced lockdown due to the pandemic, and even as the economy begins to slowly open up, our buying habits are changing.
We have come to realize we don't need as much stuff as we once thought we did. We don't eat out as often. We aren't travelling nor are we spending time in department stores or malls and if we do decide to splurge it appears to be spending on areas such as self-care. While necessities are a focal point, discretionary spending is on the backburner.
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According to a new survey from Simplii Financial, when Canadians were asked what was top of mind, the result? Simplicity. An overwhelming majority of Canadians (81%) want to simplify their lives.
This shouldn't come as any surprise as the alarm bells have been ringing for some time as the debt levels of Canadians continue to grow and have been bordering on being unsustainable for years. Discretionary spending has come to almost a standstill in many cases crushing small business owners.
Here is a classic example of how our lives are changing;
The Agri-Food Analytics Lab at Dalhousie in partnership with Caddle conducted a highly comprehensive survey with over 10,000 participants to assess how many Canadians are thinking of changing their lifestyle to spend more time working from home, even after the pandemic is over.
Approximately 23.6% intend to work from home more often a year from now and of those who plan to work from home 57% plan to spend less at restaurants. This is potentially devastating for the Canadian hospitality industry, which according to the report, stands to lose $20 billion in revenues next year, of which 30% may be due to telecommuting.
It makes sense. Prior to the pandemic 36.8% of us were going to a restaurant for a meal or break once or twice a week. Working from home in many cases outside urban centres results in that number dropping to 23.3%.
The pandemic has forced us to change and taught us to rely more on digital technology. Our behaviours of the past have changed and possibly a new norm is being instituted into our lives.
Simplii Financial also highlights a third of us want to manage our finances and expenses better. And more specifically spending in areas such as food takeout/delivery (44%), household technology (34%) and entertainment (29%) expenses.
Many organizations are not in a hurry to have employees return to the workplace and the result is while Canadians are starting to spend, the focus has for many shifted to what they need versus what they want.
This change in consumer behaviour may be good for the household budget but for business owners who have relied on the consumer, the landscape appears to be shifting and the verdict is still out on whether the consumer will continue to drive the Canadian economy forward.