With the economy, stock markets and jobs outlook all throwing mixed signals at Canadians, it shouldn’t be surprising they’re giving off the same vibe.
A raft of surveys and reports released in recent days suggest some consumers plan to spend more this holiday season, but more plan to spend less.
The latest monthly index measuring consumer confidence from the Conference Board of Canada suggests the recent bout of economic turbulence, led by wobbly markets and tanking oil prices, shows optimism taking a few steps back.
MORE: Jitters over oil, stocks, home prices rattle consumer confidence
That’s translating into a cautious stance from consumers ahead the annual holiday shopping bonanza – the busiest retailing period of the year.
According to a survey released Monday by Deloitte, a professional services firm, most Canadians say they are planning to hold the line, content to spend only as much this year as they did in 2013.
Some 57 per cent of respondents said they’re planning no increase or decrease in spending intentions, the survey said. More than a third, or 34.3 per cent, say they’re planning to spend less, while just over eight per cent say they intend to spend more.
“Many Canadian consumers are pretty tapped out,” Jennifer Lee, a retailing expert at Deloitte, said.
Spending drop
In another survey from BMO, the average amount of money being earmarked for gifts has fallen 19 per cent, based on a survey of just over 1,000 Canadians.
BMO says the average spend will amount to $551 this year compared with $678 in 2013.
Sal Guatieri, a senior economist at BMO Capital Markets said several economic factors could weigh on Christmas spending.
“With slower job growth this year, and many new jobs being part-time positions, Canadians are facing weaker income growth heading into the holiday season,” Guatieri said. “Recent stock market volatility and elevated household debt could also dampen sales.”
MORE: Experts fret Canada becoming ‘nation of part-time workers’
Retail sales have been flat in recent months as consumers ease off the spending amid near-record levels of debt.
Moneris Solutions, the biggest processor of payments for credit and debit cards in Canada, said last week consumer spending growth has been negligible of late, and the trend will persist into the home stretch of the year.
Another survey last week, from Field Agent Canada, suggested average spending per person is poised to fall 7.2 per cent.
For retailers depending on the holiday push to generate as much as 30 per cent of their yearly sales, the potentially sedate shopping environment will pose a challenge.
MORE: Target says it ‘has work to do’ ahead of key holiday season
Still, the group of respondents in the Deloitte survey who said they plan to spend more is actually up 1.9 percentage points compared to 2013.
And many who say they won’t spend a penny more than last year will end up breaking their vow, Lee predicts.
“Shoppers have an uncanny ability to spend just a bit more than they originally planned,” the survey said.
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