B.C. retailers are bracing for what may be a holiday season that’s a little less merry and bright on the balance sheet.
A new survey by the Bank of Montreal has found more than three-quarters of Canadians plan to cut back on holiday spending, amid the rising cost of living.
Along with 78 per cent saying they’ll buy fewer gifts, nearly half — 45 per cent — said they’d also spend less money. Just over a quarter of respondents said they’ll shorten their gift list, while more than one third said they weren’t confident they could afford every item on their holiday shopping list.
David Ian Gray, a national retail strategist based in Vancouver, said for the first time an entire generation is facing the difficult combination of rising debt, high interest rates and inflation coupled with a low-growth economy.
“A lot of the consumer sentiment around spending and starting to really seriously budget and pull back was beginning sort of May, June, and most of the retailers out there are now adjusting to it already,” Gray said.
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Gray said retailers are cutting back on the number of staff they’re hiring for the holiday season, and dialing back on major door-crasher sales as well.
“The ones who are going to do best at retail are the ones that really planned well and are not going to be stuck with too much inventory they’re going to carry over to the new year,” Gray said.
Meanwhile in B.C., the trend towards online shopping appears to be growing further as shoppers seek to save a little more on their purchases.
A new survey from FedEx found 38 per cent of B.C. shoppers intended to try and cut holiday spending with online deals, an 11 per cent increase compared to the rest of Canada.
More than half (52) of British Columbian respondents said they’d shop online rather than in-person, with two thirds saying it was more convenient and 44 per cent saying they preferred the method to compare products and prices.
While the data suggests the potential for a gloomy retail outlook, Gray said the effect likely won’t be evenly distributed.
Grocers, he said, look set to benefit from people cutting back on restaurant meals. The luxury end of the market and businesses serving younger shoppers who may live at home without bills or rent will also likely be insulated, he said.
“We’re going to see winners and losers,” Gray said, adding that people may still shop, but buy cheaper or fewer items.
“There was always those who would in the past,” he added.
“There’s more now because of the economic climate and people being forced into some harsh personal consumption decisions — however, it doesn’t mean they are not going to buy anything.”
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