This year's Christmas shopping season, Canadian shoppers have become more frugal in the face of inflation, rising interest rates and soaring food prices. The rising cost of living has forced many people to choose more affordable ways to celebrate the holidays, such as simplifying holiday meals and buying discounted food whenever possible.
According to a report by Dalhousie University's Agri-Food Analysis Laboratory, this year's holiday food costs are higher than usual! For example, preparing a traditional turkey dinner for four to six people costs an average of $104.85. The price of turkeys increased by 5%, potatoes by 6.6% and carrots by 12.8%. Vegetable prices are expected to be higher.
Retail analyst Bruce Winder noted that many retailers are facing serious challenges due to difficult economic conditions in the fall. Many retailers are expected to go bankrupt in January and February next year. He explains that this trend is partly due to the increasing reluctance of consumers to buy full-priced items, putting huge discount pressure on stores!
Wendell also noted that most consumers are looking for more economical ways to celebrate than last year, such as just waiting for discounted items. There are also many people who buy discounted products online in response to the current economic situation. This change in consumer behavior has had a serious impact on retailers, forcing them to adjust their strategies to attract more customers looking for discounts and savings.
Isn't this a vicious circle of involution? . .
This year's shoppers tend to buy second-hand, refurbished and homemade gifts, known as "Thriftmas." He also said that consumers have reduced the number of purchases and are choosing to celebrate at home rather than eating out. Many people plan to reduce holiday spending in response to the impact of high inflation and high interest rates.
According to Nanos Research, a North American data research firm, 54% of Canadians said they would reduce holiday spending. In terms of holiday spending, in addition to reducing spending by 53%, 41% said it would be the same as last year. When it comes to spending on holiday food, 49% said they will prepare holiday meals at home this year and cut down on eating out. In terms of holiday socialization, 58% of people said they would reduce social interactions, indicating that people would rather reduce social activities in order to save money!
Still, there are those who say they will stick to their usual Christmas plans. For example, Gary Mackenzie of Vancouver Island said that despite the increased cost of food, he and his wife will continue to look for bargains to celebrate the special day. And Deen Teague said his family will celebrate Christmas despite the bad economic situation.
Finally, Peter Goldsztajn, vice president of data and analytics at Moneris Enterprises, said shoppers want this year's discount promotions to last longer. And Wendell expects that the second half of 2024 could be better for Canadian retailers if interest rates fall and more cash is released to Canadian consumers.