Shoppers more cost conscious than ever as Black Friday kicks off holiday spending season
It’s Black Friday, and Canadian shoppers have joined the born-in-the-U.S. retail frenzy to hunt for deals. But amid the heavy weight of inflation, shoppers are showing signs of being choosier than usual about where to spend their holiday shopping dollars.
Data from Statistics Canada shows a clear trend that spending has slowed in recent months, with sales volumes dropping every month since June. September numbers are due out on Friday morning, but an estimate from last month suggested it was on track to be flat yet again.
Economists like RBC’s Carrie Freestone say they can see the slowdown playing out in real time as consumers adjust their budgets. Data from the bank’s consumer spending tracker, which tracks anonymized debit and credit data from RBC’s millions of clients, shows people are spending about 10 per cent more on essentials than at this time last year.
“That’s groceries, gasoline, phone bills and utilities,” Freestone told CBC News in an interview.
Spending is up in those categories mostly because it has to be. But instead of being a sign of splurging, families are offsetting by cutting back anywhere they can.
“You still have to cook dinner for your kids, and you still have to drive them to school,” Freestone said. “Things you obviously can’t substitute away from, that’s where consumers are really getting hit.”
Instead, consumers are starting to pull back on spending on services, “because these are areas of spending that are more sensitive to higher rates,” Freestone said.
“We’re seeing fewer vacations being booked, and restaurant spending is definitely down,” she said.
Consumers being choosy
Big box retailer Staples Canada doesn’t sell either beach vacations or nights out, but it’s still keenly aware that consumers are being choosier than usual this year.
“We know customers are working hard for their money. They’re being intentional about how they spend their money. So what we’re trying to do is give them options from end to end, across all price ranges,” said Rachel Huckle, president and chief operating officer of Staples Canada, in an interview with CBC News.
Staples is one of many retailers that participate in Black Friday sales, but it is doing things a little differently this year. They rolled out planned sales at the start of November and promised customers they don’t have to worry about prices going down even more between now and Christmas.
Huckle said even with consumers watching their pennies, there’s still strong demand for things like tech and gadgets.
“People are stretching their wallets even further, and they’re having to make trade-offs,” she said.
Featured VideoShoppers at Sherway Gardens in Toronto tell CBC News how their holiday spending plans have changed this year, as family budgets adjust to the current era of high inflation.
That sentiment is being clearly expressed from shoppers themselves.
Rohit Sahu was browsing the shops at Toronto’s Sherway Gardens mall this week. He said he’s more aware now of how he spends every dollar. “Everything’s so expensive that you’re just cutting costs and trying to … be low-key and save money,” he said.
He said he’s a window shopper because nothing has met his high bar for what qualifies as a bargain right now. “The deals are good, but still not affordable for us.”
Maream Kamil said she hasn’t changed her budget for treating herself but said her money isn’t going as far as it used to.
“Before you would walk out with three tops and it was $100,” she said. “Now it’s a one-for-$100 kind of thing.”
