- Gen Z and Millennial holiday spending is expected to increase by 55% and 51% respectively this year, compared to 2023
- Gen X and Baby Boomers say they will reduce holiday spending by 11% and 9%, respectively, year over year
- Overall, retailers should expect a 13% increase in spending with younger generations preferring quality, sustainability, and ability to pay using a digital platform
TORONTO, Oct. 8, 2024 /CNW/ – Canadian retailers can expect a spending surge during the 2024 holiday season driven by younger shoppers, according to a recent survey conducted by PwC Canada. This year’s edition of PwC Canadian Holiday Outlook Survey reveals a widening generational divide, with Gen Z and Millennial shoppers poised to outspend older Canadians.
Gen Z and Millennials plan to spend an average of $2,296 and $2,233 respectively this holiday season – increases of 55% and 51% over last year. Their growing disposable income with Gen Z’s entry into the workplace and Millennials advancing in their careers is resulting in a boost in spending on gifts, travel, and entertainment.
In sharp contrast, Gen X and Baby Boomers are cutting their spending this holiday season. The more cautious approach from older Canadians is leading to decreased spending across all categories, with expected holiday spending for these generations averaging $1,766 and $1,412 respectively – down 11% and 9% from last year.
“Retailers across Canada are poised to benefit from a clear spending surge from younger Canadians this holiday season, despite the affordability challenges that make headlines every day,” explains Elisa Swern, National Retail and Consumer Leader at PwC Canada. “If they adapt their business strategies to align with these shoppers’ values and buying preferences, such as prioritizing quality and sustainability, and embracing digital payment platforms, retailers are poised to capitalize on the spending plans of these younger shoppers.”
On average, Canadians estimate that they will spend $1,853 on gifts, travel and entertainment this holiday season, a 13% increase over last year. Not surprisingly, Canadians are thinking more positively about the economy as inflation and interest rates decline: 65% believe the economy will stabilize or improve over the coming months, up from 48% a year ago.
Respondents from the Prairies1 and British Columbia expect to spend the most this holiday season, estimating spending on average $2,188 and $2,126 respectively. Quebec, on the other hand, will be the most frugal, estimating spending just $1,474, the lowest average estimate of any province.
While many Canadians expect to spend more this year, they don’t necessarily have the cash to do so. 31% of Canadians said they would dip into their savings, with 32% in Quebec taking this approach. Consumers in Ontario and Quebec are most likely to use retail financing options (19% and 18% respectively), and 20% of Ontarians said they would take on more debt.
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1 Prairies refers to Manitoba and Saskatchewan
The survey also reveals key trends that businesses should consider this holiday season:
- Loyalty Perks: Many Millennials, Gen X and Baby Boomers said they’d switch to brands that offer more compelling loyalty program perks to get more value for their money—a finding that underscores the importance for retailers and consumer goods companies to explore what differentiates their loyalty program from competitors. But loyalty programs don’t appeal as much to Gen Z consumers who instead look to make their money go further by buying higher-quality items, using retail financing options, and buying second-hand items.
- Tangible Gifts Triumph: While older generations prioritize gift cards, Gen Z prefers giving physical items. This preference for tangible gifts reflects a desire for personal connection and thoughtfulness in gift-giving. Popular choices include apparel, cosmetics, toys, and alcohol.
- Digital Payment Preference: Embracing their digital native status, Gen Z consumers are leading the charge in using digital payment methods like PayPal (44% compared to 31% overall), Apple Pay and Android Pay (35% compared to 14%), and buy now, pay later platforms (11% compared to 5%).
- Early Shopping: Gen Z shoppers are more likely than their older counterparts to complete their shopping early. 21% of Gen Z respondents say they plan to complete most of their shopping before Thanksgiving, compared to just 11% of shoppers overall.
- Value and Sustainability: Gen Z and Millennials demonstrate a strong preference for sustainable and ethically conscious brands. If businesses can clearly communicate and market their products in this way, these generations will be encouraged to buy.
To read more about consumer spending trends and the Canadian holiday outlook, access the detailed report here.
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