*blurry image of shopping mall and customers during holiday season*

By Mario Toneguzzi

A new report suggests Canadians will pull back on their holiday spending this year as the devastating impact of the COVID-19 pandemic continues to hit the struggling retail industry.

According to PwC Canada’s Holiday Outlook report, Canadians expect to spend an average of $1,104 this year which is down nearly 31 percent from last year’s $1,593.

HOLIDAY SPENDING IS FORECASTED TO BE DOWN 31% FROM LAST YEAR DUE TO COVID-19

The survey reached out to 1,000 consumers in Calgary, Montreal, Toronto, and Vancouver.

"Many Canadian consumers and retailers aren't sure what to expect as we approach the 2020 holiday season. This year, the impact and implications of the COVID-19 pandemic are top of mind for consumers. Canadian consumers plan to do more of their shopping online than in stores this holiday season, as they focus on convenience, health and safety, rather than the shopping experience itself,” said Myles Gooding, National Retail Leader, PwC Canada.

“One thing is clear: successful retailers will be those who adapt to our quickly changing business environment and understand what a more digital world means for how they interact with consumers.”

Gooding said the spend between gifts and travel historically has roughly been the same in terms of dollar value.

“That’s where this year it took the biggest hit, primarily because of travel restrictions for COVID-19, leaving the country. The travel industry in itself has taken a pretty big hit overall in the economy,” he said. “When we look at the specifics with travel being down nearly 60 percent is really what is taking the wind out of a lot of the spend this year. That followed by entertainment. At the time of the survey entertainment is probably going to be down around closer to 20 percent. It may take a bigger hit as new restrictions are starting to take place.”

The survey said 86 percent of Canadian consumers expect to spend the same or less this holiday season, with deep cuts in travel spending. When asked how the pandemic will affect their personal spending capabilities for the holiday season, 57 percent of respondents said it's had a negative or slightly negative impact. Also, 85 percent of Canadian consumers plan to use their credit card at some point during the holiday season. Among those, 79 percent of them aren't worried about debt.

In 2020, Canadians will spend $630 on gifts (versus $647 in 2019) , $308 on travel (versus $743 in 2019), and $166 (versus $204 in 2019) on entertainment.

MILLENNIALS ARE EXPECTED TO SPEND THE MOST THIS HOLIDAY SEASON

Among the generations, Millennials are set to spend the most. When looking at overall holiday shopping, Gen Z (17-24 years old) and Millennials (25-38 years old) plan to spend $1,216 on average, compared to $1,058 for Gen X (39-53 years old) and Baby Boomers (54-73 years old), said the report.

“Another major trend accelerated by the pandemic is curbside pick-up, with 33 percent of shoppers choosing this method for their online purchases, compared to 13 percent last year. Unchanged from last year is the fact that Gen Z and Millennials are most likely to use this method either regularly or on occasion. When it comes to in-store shopping trends, we're seeing a big generational divide: 60 percent of those planning to do at least three-quarters of their holiday shopping in stores are aged 55-plus. When it comes to what influences consumer purchases, we're seeing another big generational divide: younger generations are much more likely to be influenced by online and social media advertising,” said PwC.

Gooding said COVID has accelerated the pace of growth in day-to-day online shopping and online cross-border shopping is also increasing. The online shopper is becoming more of a global shopper. People are also shopping earlier this year because they want to make sure their purchases arrive in time for Christmas.

A Leger survey commissioned by Moneris shows that 76 percent of Canadians intend to shop local this season, and 70 percent will do more shopping online.

The survey found women are significantly more likely than men (80 percent versus 72 percent) to want to support local businesses and increase their online shopping (74 percent vs 66 percent).

Peter Goldsztajn, Moneris Director, Corporate Data Analytics, said the trend to local shopping is indicating a shift in overall sentiment.

“I think people are trying to support local — keep the money local. It’s a call to action for small businesses — local businesses — if you’re not online this is the opportunity to do so. It’s not too late,” he said.

He added that 28 percent of Canadians plan to give more gift cards which will fuel the ecommerce boom and 16 percent plan to give more experiential gifts.

Mario Toneguzzi, based in Calgary, has more than 40 years experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald covering sports, crime, politics, health, faith, city and breaking news, and business. He now works on his own as a freelance writer and consultant in communications and media relations/training.

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