Canadians are projected to spend 13% less on gift-giving this year as they save money for essentials, but that doesn’t necessarily mean Black Friday will be a total bust for retailers.
Driving the news: Retailers are set to offer big deals (even by Black Friday standards) as they look to offload their overstuffed inventories—a big draw for cash-strapped shoppers.
- Items that did numbers early in the pandemic (like furniture and big-ticket electronics) are now just taking up storage space and will be subject to significant markdowns.
Why it matters: Black Friday is still the single-biggest Canadian shopping day of the year. If sales numbers disappoint, it could be a sign that consumer confidence is worse off than economists thought and could spell bad news for retailers this holiday season.
Zoom out: Even as the toxic cocktail of high inflation and a looming recession led to an outbreak of Tightened Pockets Syndrome (TPS), consumers haven’t stopped discretionary spending; they’ve simply adjusted their habits and are hyperfocused on deals.
- While sales of smartphones might go down, toy sales are set to remain strong as parents don’t want to disappoint their kids with a barren Christmas tree.
Yes, but: Some Canadians are just taking on more debt to enable their personal giving, or, conversely, avoiding debt (in the short-term) by turning to buy-now-pay-later solutions.
Bottom line: This holiday season things might be less “shop till you drop” and more “shop till you get a little woozy, but still remain upright with your balance intact.”