Most Canadians Will Spend Less on Holidays Due to Cost of Living: Survey

People pass a large Christmas tree as they go shopping on Christmas Eve at a mall in Ottawa on Dec. 24, 2020. Justin Tang/The Canadian Press

More than three-quarters of Canadians plan to tighten their budgets this holiday season amid growing economic challenges, a new survey suggests.

More than 70 percent of Canadians said inflation has affected their gift-giving plans, and 76 percent expect to spend less on holiday shopping this year compared to last, according to the Oct. 16 survey conducted by business insights company Givex. Budgeting for holiday necessities may also change with inflation this season, with 57 percent of respondents expecting to spend more on groceries.

“The impact of inflation remains a critical factor in influencing consumer behaviour this holiday season,” said Givex president Brittain Brown.

Younger Canadians appear more likely to feel the impacts of inflation, said the study, with almost 80 percent of those aged 18 to 34 and those aged 35 to 54 changing their gift plans because of higher costs.

The study noted that last year a similar proportion of Canadians, 74 percent, reported changing their gift-giving plans because of inflation.

The likelihood of dining out is also dropping, the survey found, with more than 75 percent of respondents saying they may spend less at restaurants during the holiday season. On average, Canadians are budgeting around $200 to dine out during this period and, compared to last year, more are looking for restaurants that offer promotions.

When it comes to budgeting for holiday gifts, Canadians plan to spend an average of $290 on them, with 30 percent planning to spend $400 or more. Nearly a quarter of participants said they will buy holiday presents based on loyalty programs and rewards points, while 18 percent said they want to do most of their holiday shopping on Black Friday this year.

Despite financial pressures, Canadians will continue to spend on non-essential items such as gifts, travel, dining, entertainment, and charitable donations this holiday season, the study said, with a total average budget of $750.

The survey was conducted online from Sept. 10 to Sept. 12 among 1,525 Canadians who are members of the Angus Reid Forum.

Holiday Gift Cards

Gift cards also appear more popular this year, according to the survey, with 28 percent of respondents planning to spend at least $200 or more on them, up eight percentage points from 2023.

Hope of receiving holiday gift cards is also higher this year, according to Givex, with nearly 55 percent of Albertans and 53 percent of Atlantic Canadians saying their preferred present would be a credit card gift card. Among Manitobans, meanwhile, gift cards for necessities like groceries and gas were favoured by 56 percent, the highest percentage across Canada.