One in three Canadians say they will spend less over the holiday season this year, as high prices force them to scale back on shopping and gift giving, a new Yahoo/Maru Public Opinion poll has found.
The survey of 1,522 Canadians released on Friday found that 30 per cent of respondents will be spending less over the holidays this year as inflation continues to force people to cut back on discretionary spending. While the poll found that 11 per cent of respondents will actually spend more over the 2022 holiday season, another 11 per cent said they won't do any gift shopping at all. An additional 48 per cent of Canadians said their holiday spending levels will be the same as in 2021.
Still, on average Canadians say they will be spending less this year. The survey found that the average intended spend per consumer is $549.60, a drop of $128.40 compared to last year.
Inflation is the most significant factor affecting spending. Of those who are cutting back on holiday shopping, 51 per cent said that inflation has caused them to cut back spending on everything. Those reducing spending also said inflation has made gifts too expensive (33 per cent) and that they don't have the money to spend on gifts (31 per cent).
"Consumer spending will likely be considerably less for this year’s Christmas and holiday season when compared to a year ago, and it’s a direct result of inflation eating away at consumers' wallets," Maru executive vice-president John Wright said.
"Add to that, higher interest rates and drained savings to cover the expense spread, and it all amounts to a lump of coal for retailers when compared to last year."
The holiday shopping season, which kicks off in the lead up to the Black Friday and Cyber Monday shopping events, is critical for retailers. There are already signs that this year will be particularly challenging.
Salesforce data released this week found that Canadian shoppers held back on Black Friday and Cyber Monday shopping, even as global sales increased 2 per cent annually. Online sales were down 8 per cent compared to last year, and the average order value was flat, increasing by 0.3 per cent to $106.
GDP data released by Statistics Canada this week also showed that personal expenditures fell 1 per cent in the third quarter of the year. Household spending edged down 0.3 per cent in the third quarter of the year, the first decline since the second quarter of 2021.
And the spending cutbacks may continue. With the poll finding that most Canadians still have a majority of their budgeted spending left to do over the next month, Wright said "there's nothing to guarantee there won't be some further wallet shrinking over the next few weeks."
"The impact of this pullback will no doubt be carefully weighed in the first quarter of 2023, not only by businesses, but also by the Bank of Canada, finance ministers, workers, and household across the country, as to whether this is an economy headed into a full-on recession," Wright said.
The survey of 1,522 Canadian adults was conducted between Nov. 25 and Nov. 27 and has an estimated margin of error of +/- 2.5 per cent, 19 times out of 20.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.