Mastercard SpendingPulse reveals encouraging signs for Canadian holiday retail sales, with several factors enhancing consumers’ purchasing power.
Mastercard’s annual SpendingPulse report, which measures in-store and online retail sales indicators, estimated that Canadian total retail sales are expected to increase 2.2% year-over-year (YoY) this holiday season, which covers the period between November 1 and December 24.
Consumers are expected to favour in-store shopping over online purchases this year, as many find it easier to discover deals and stretch their budgets by browsing physical stores. Besides, retailers try hard to lure customers into brick-and-mortar stores with elevated in-store experiences, in-store exclusive deals, and more.
At the same time, the shoppers aren’t going to reduce their holiday budget significantly. In fact, several encouraging macroeconomic factors, such as the drop in inflation and the reduction of interest rates, are expected to contribute to the boost in spending power in Canada this season.
Some of the most popular gifts this season include gadgets, fashion items, jewellery and accessories.
With a projected 4.2% YoY increase in electronics spending, Canadians are likely to splurge on the latest tech gadgets this holiday season. Price reductions, along with the introduction of new devices such as phones and video games, are anticipated to drive strong growth in this sector as electronics continue to be among the most sought-after items for 2024.
Holiday spending on apparel is expected to grow by 2.5% year-over-year, driven by seasonal wardrobe updates and gift purchases. Similarly, spending on jewellery and accessories is projected to rise by 2.6%, fueled by the popularity of items like necklaces, watches, and earrings as holiday gifts.
A larger portion of holiday purchases is expected to take place in December since most expected annual Black Friday discounts, which are a traditional kickoff for holiday shopping, are happening on Nov. 29 this year.
This picture differs from the 2024 holiday shopping trends in the U.S. According to a recent survey, almost 38% of the 1,200 U.S. respondents have already started their holiday shopping, with only 20% planning to wait until Black Friday. These results correspond to the ongoing trend of American consumers trying to spread out their holiday purchases over a longer term as they cannot afford to spend large sums at once.
