As the inflation rates settle down slowly, Black Friday 2022 might look different for Canadians. A new report says holiday spending in Canada is expected to shrink consumer spending power.
Canadians are cutting back this holiday season as we expect a recession next year and a worsening economy. Holiday Retail Outlook released by Deloitte Canada mentions a 17 per cent decrease in holiday spending from 2021 by an average household. High inflation is outpacing the wage growth, while it dropped from 7.0 per cent to 6.9 per cent in September, the inflation shock will take considerable time to settle for the consumers.
The report highlights that an average of $1,520 will be spent over the holidays by the average Canadian household, which is in fact a considerable amount. Reddit users are having mixed emotions.
Price marking is another set of things to look at. Higher prices across any retail store can be witnessed by consumers, even if we go for groceries. A simple example would be a weekly grocery run to Walmart, where the sale prices are marked higher. Retail prices are often marked higher than before due to inflationary pressures and other supply chain issues. Hence a lot of sticker shocks can be expected during the sale.
A report conducted by a Leger survey consisting of more than 1,000 Canadians mentions one in three Canadians will start shopping earlier than compared to 2021.
Consumers may be resistant to buying if the markup price is not what they thought but 72 per cent will shift brands if their preferred brand is too expensive. Deceptive discounts can affect those customers who have not priorly researched the item they are willing to pay for. Yet there would discount from retailers who have excess inventory and are willing to move it out. A helpful tip would be to hunt around stores and observe what is worth your money.
On the other side of things, retailers also began marketing their sales before the season even arrived. They have responded by rolling out Christmas-themed products earlier, some as early as September.
For retailers, inventory would be their biggest asset yet liability as they try to keep their supply chains agile and right product is available. The consumers have been trained to see their preferred item with an out-of-stock sticker, and if the supply chain issues persist, that habit can be hard to rid of. Meanwhile, retailers like Amazon have an upper hand to win consumers’ interest and tend to remove that habit or at least offer another option.
With the onset of holiday sales across the province, it will be interesting to see how much money consumers are willing to spend and how different the sales will look. Comparison shopping and online price trackers would come in handy and will get you ready for this Black Friday!