Holiday spending could climb despite economic worries: study
Last Updated: Tuesday, November 11, 2008 | 8:13 PM ET
The Canadian Press
A new survey suggests Canadians could actually spend more money this holiday season than they did last year, despite recent widespread indications that consumer confidence has been rattled.
Just over half of respondents to a survey by financial advisory firm Deloitte said they plan to spend at least as much this holiday season as they did last year.
"It may sound strange, but we view these results positively and believe that Canadian retail sales this year will be higher than last year," stated Deloitte's Brent Houlden.
"But Canadian retailers will have to work hard to earn that holiday spend, as consumers will be scanning for value and hunting for bargains."
Meanwhile, 40 per cent said they will spend less this year, compared to the 25 per cent who said they planned to spend less in 2007 than they did in 2006.
Bruce Cran of the Consumers' Association of Canada, however, said the bad economic news just keeps piling up, and he has a hard time believing Canadians will be spending their way through the holiday season.
"I think we're in very difficult times, and that's what we're hearing from consumers is that they're cutting back, looking for bargains and delaying making purchases of items of a larger nature," said Cran.
"It's as bad as I've ever seen it at any time in my lifetime," he added.
A recent survey by the Conference Board of Canada found that consumer confidence fell in October to its lowest level in more than 25 years on dire global economic news.
"I don't think there's any rosy side to this at the moment," Cran said.
Deloitte said lower gas prices will mean a little more money in pockets, but the survey also suggested shoppers will be looking for savings: 83 per cent said they are planning to buy more items on sale this year.
And the sagging loonie will mean more shopping at home, the survey suggested, with 41 per cent saying they plan to shop south of the border, down from 64 per cent in 2007.
"Compared to last year, when the Canadian dollar was at or above par leading up to the holiday season, we expect to see a significantly lower number of Canadians spending their holiday budget south of the border this year, which will help out our Canadian retailers," said Houlden.
There will also be less online shopping, the survey suggested, with 63 per cent of respondents saying they don't plan to make any holiday purchases on the web.
According to the survey, shoppers in Toronto and Vancouver are the most likely to decrease their holiday spending this year.
Commissioned by Deloitte and conducted online between Sept. 29 and Oct. 9, the survey polled a 2,847 Canadians, yielding a margin of error for the entire sample of plus or minus 5 percentage points, Deloitte said in a release.
