A retail analyst is predicting Canadians are going to remain cautious in their spending this year due to political uncertainty, interest rates, inflation and unemployment.
“There was a lot of dinner discussions around the holiday as well about where we are as a country and where we’re going economically,” retail analyst Bruce Winder told Global News.
“Discussion about change and also discussion about where the U.S. is headed and how Canada can try to maintain a good partnership with the U.S., particularly as it relates to tariffs on our imports.”
President-elect Donald Trump previously stated that he will impose a 25 per cent tariff on any goods imported into the United States from Canada and Mexico.
“On a more practical level, consumers will adjust the way they buy,” Winder added.
“They’ll buy more essentials and less discretionary items. They’ll also buy more thrifty items, especially younger generations like Gen Z. But people are looking at thrifting items that go on to Facebook Marketplace or their local thrift store, and they might be able to buy something there instead of paying full retail.”
Winder said people will also continue to shop at stores such as Dollarama and stores that offer reward points.
“If you’re sort of a higher-priced furniture company or something like that… you’re going to be under a lot of stress,” he added.
Consumers tend to give up higher-priced items or high-end services first, Winder said, and focus on the essentials like food and shelter and gas.
Following the news on Monday that Justin Trudeau has resigned as the Liberal leader and will step down as prime minister, Winder said we will likely see consumer confidence improve.
“Canadians are ready for a change,” he said. “Canadians have the same government federally for almost 10 years. So that, without depending on who gets it, that’ll bring hope to the people, too.”