Sunday, December 5

Posthaste: Ready to splurge this holiday season? Majority of Canadians keen to run up credit card debt after tough year

Good morning!

Cooped up for more than 18 months, Canadians are eager to spoil family and friends again and ready to splurge this holiday season, a new Deloitte reports.

Canadians are expected to spend an estimated $1,841 during the holidays, compared to $1,405 last year, a 31 per cent increase. It will be even higher than the pre-COVID era in 2019 when Canadians spent $1,706 on average. Canadians will even outspend their American counterparts, who are expected to spend $1,831 (US$1,463) this season, according to Deloitte Canada. More than two thirds (66.1 per cent) planned to use their credit card for their extra purchases.

A Statistics Canada report notes that households in Canada were $2.3 trillion richer by the second quarter of 2021 compared to the same period last year — so they appear to have the firepower to splurge. Canadians also intend to spread the holiday cheer by spending more on charitable donations ($153 this year versus $87 in 2019).

Key reasons for the overall splurge were Canadians’ desire to treat family and friends after a challenging year, higher costs of goods, the need to update personal items and improving household finances.

“There are two caveats to this bright outlook, however: concerns about inflation, which is increasing living costs, and the growing disruption to global supply chains, which has reduced product availability and contributed to price increases,” Deloitte noted. “Retailers should encourage customers to spend early this holiday season to help them get what they want.”

Some Canadians were, however, looking to spend less, citing higher prices of food, cost of living, transport and energy, or deteriorating financial situation for their austerity.

Fort those eager to spend, a major concern is the critical supply chain issue, which could delay gifts.

At least 35 per cent of Canadians surveyed by Deloitte said they began shopping before November, and 14 per cent intend to complete their shopping on Cyber ​​Monday (November 29). While 65 per cent said they will take it down to the wire, finishing their shopping by December — that’s still below the 75 per cent who finished shopping in December in 2019.

“Although more than half of Canadians (56 per cent) cite COVID-19 concerns as a reason to avoid in-store shopping this year, those who shops start their holiday shopping late may find themselves forced to head to the malls, as potential supply chain disruptions and shipping delays could make it difficult for online items to arrive in time,” Deloitte said.

And while’Buy Canada’ may be top of mind for many Canadians, with 53 per cent eager to buy gifts from local businesses, ecommerce giant Amazon will remain the top destination for Canadian shoppers, with 62 per cent planning to buy their gifts from the website.

“Likewise, 40 per cent of Canadians are now Amazon Prime members, up from 37 per cent last year,” Deloitte noted. “All told, most consumers will be looking to Amazon this year for the convenience of shopping from home (62 per cent ), 24/7 availability (57 per cent), and home delivery (53 per cent).”
Amazon also remains the leading destination for gift inspiration for the second year in a row (57 per cent), ahead of browsing stores (56 per cent) and Google searches (55 per cent), Deloitte noted.