Consumers spend smarter in 2025, blending value-seeking habits with selective indulgence
Despite a sluggish economy and persistent unease, Canadians plan to loosen their purse strings slightly this holiday season, which may give some good news to under-pressure small businesses.
According to Deloitte’s newly released 2025 Holiday Retail Outlook, overall spending is forecast to rise by 3%, a modest lift driven by gifts and experiences, while non-essential purchases continue to shrink.
The uptick may reflect mild recovery in household finances as 32% of respondents say they’re worse off than last year, down from 36% in 2024. But optimism remains elusive with nearly half (46%) believing the economy will weaken in 2026, and 70% still fearing a recession. Tariffs are another worry, with 80% expressing concern over their impact on Canada’s growth.
Gift and experience spending is expected to rise 2%, while non-gift purchases will dip 8%. Categories such as grocery (+14%), dining out (+11%), and gift cards (+10%) show gains, underscoring a continued “treat yourself” mindset, even as consumers trim elsewhere.
“Even as some consumers experience modest improvements in their financial situations, heightened concerns about a potential recession are prompting more cautious spending behaviors,” Deloitte notes in the report.
Inflation anxiety remains entrenched, with 71% expecting higher prices this season, but fewer Canadians (62%) accuse retailers of unnecessary price hikes compared with last year’s 70%. Most consumers will be deal-hunting with 78% planning to shop around for bargains.
Shoppers are also starting earlier with 20% planning to begin buying in October (up from 15%), and half will shop both October promotions and Black Friday events. The split between physical and digital channels remains steady: 55% of budgets go to in-store shopping, while Gen Z and Millennials spend nearly half online.
While 73% of consumers prefer to support local or Canadian businesses, the report cautions that value still outweighs sentiment. “Retailers must balance celebrating local offerings with delivering value and convenience—while avoiding overstated ‘maple washing’ claims,” it advises.
