While the pandemic has changed how we are celebrating the holidays this year, it has also brought some unexpected results when it comes to Christmas shopping.
In what some have called the most peculiar recession in at least a century and despite research by accounting firm PricewaterhouseCoopers suggesting that more than half of Canadians said the pandemic has had a negative impact on their spending capabilities – this year’s holiday shopping season has had some surprising results so far.
According to a recent CBC report, Canadians are, on average, devoting as much money to shopping as they have in years past. And a sharp rise in savings for some, coupled with an evident increase in hardship for many others, has prompted some Canadians to donate more to charities that directly help those in need.
“There’s no question about that, that people are spending differently this year, Ksenia Bushmeneva, an economist at TD Bank who observes retail activity, told CBC. The pandemic dictates its own rules, and restrictions on businesses also dictate how people shop and where they shop.”
Two trends are emerging this holiday shopping season.
Holiday spending is usually roughly divided between gifts and travel; however, pandemic travel restrictions mean that most people are staying home this year.
Another big shift is away from spending on services, such as meals out or going out to a movie, to purchasing gifts.
While some retailers continue to suffer the fallout from the pandemic, especially those who rely on foot traffic in areas where stricter lockdown measures are in place, data from various sources suggests that those savings are helping boost the total spending on goods, including groceries, in both brick-and-mortar stores that remain open and online.
Michael LeBlanc, senior advisor with the Retail Council of Canada, told CBC he remains optimistic about the transformative effects of the pandemic.
“It’s very hard to survive your store being shut down over Christmas, let’s not candy coat it,” he said. However, he added that the acceleration of e-commerce that has occurred as a result of the pandemic has advanced the trend of online shopping, especially in the grocery store business, by as much as seven years.
According to RBC’s Consumer Spending Tracker, consumer spending saw a dip after the initial lockdown, but it has bounced back and is now up from this time last year. However, not all sectors are seeing an increase in spending.
Spending on groceries continues to surge above all other sectors, and Canadians are spending more on household goods and electronics than gifts and apparel. Travel spending continues to fall and the dramatic decline in spending on gasoline has slowed but is still falling.
Published on Dec. 23, 2020.