As Canadians continue to feel the pressures of high inflation on their wallets, a new survey has found that 60 per cent of consumers plan on spending less on gifts this holiday season.
The online survey, which was conducted by Equifax Canada and included more than 1,000 respondents, also found that 41 per cent plan on spending less this holiday season because of debt, which is up from 36 per cent last year.
“Whether you’re spending more or less, it’s very important to go into holiday shopping with a well thought out budget,” Julie Kuzmic, Equifax Canada’s senior compliance officer, consumer advocacy, said in a news release. “Inflation is adding pressure to the financial situations of Canadians. Preparing and sticking to a budget may help make those credit card bills a little easier to face in January.”
Similarly, a survey conducted by PayPal Canada found that 51 per cent plan on making financial cutbacks this holiday season, such as avoiding buying unnecessary presents or limiting travel. But 53 per cent said they won't reduce their spending when it comes to buying gifts for close friends and family and would rather cut back on their own wish list.
The PayPal survey, which involved 2,000 Canadians surveyed online, also found that 57 per cent worry that this year's holiday season won't be as good as last year's due to the cost-of-living crisis. In addition, 66 per cent say they feel too embarrassed to ask for financial help from loved ones.
In October, Deloitte Canada also projected holiday spending to fall 17 per cent this year amid the economic uncertainty.
A few consumers said they plan on spending more, especially younger people. Just 12 per cent of respondents in the Equifax survey said they believe they will increase their holiday spending this year. Among those aged 18 to 34, 23 per cent chose this option, compared to four per cent of respondents aged 55 and over.
Many consumers are also planning on doing more in-store shopping this year. Of the survey respondents, 61 per cent said they plan on shopping in stores more, compared to 51 per cent last year. And with Black Friday on the horizon, 50 per cent of respondents said they plan on taking advantage of these deep discounts.
But as fears loom of a possible recession in the future, local businesses say they're feeling less confident about this holiday season. In a survey involving over 300 small businesses, Equifax found that 25 per cent are feeling confident about this year's holiday season, compared to 36 per cent last year.
“Inflation and supply chain concerns are affecting the confidence of small business owners leading up to the holiday season,” said Jeff Brown, Equifax Canada' head of consumer services, in a news release. “Businesses need suppliers to ensure product availability, first and foremost, while they try to keep prices reasonable in the wake of rising costs. The biggest thing consumers can do to help small business owners is continue to purchase products from them.”
