Consumers across Canada are preparing for a more sustainable and financially cautious holiday season according to the latest EY Future Consumer Index Survey. While health concerns from the COVID-19 pandemic begin to recede, cost of living and environmental worries are deepening, pushing Canadians to grow more concerned by the country’s economy (93%) and their personal finances (84%).
”Although consumers feel the threat of COVID-19 is fading, they are concerned about the rising cost of living which is effecting how they allocate disposable income” says Monica Chadha, EY Canada Retail Leader. “In the face of price increases Canadians are not only trading down to cheaper private label alternatives – they’re also choosing to purchase less all together.”
Consumers are optimistic despite economic challenges
Overall, Canadians are optimistic about the future with 74% looking forward to getting “back to normal” and 48% feeling eager to catch up on experiences they missed out on due to the disruption caused by the pandemic. However, 62% indicate growing concerns about the rising cost of living.
That’s why shoppers are approaching the festive season and beyond with a desire to have rewarding experiences, without breaking the bank. Almost half of respondents are choosing not to increase their spending on their families and over a quarter plan to spend less compared to last year – this is especially true when purchasing gifts for friends (40%).
Meanwhile, when it comes to celebrations, 56% of Canadians are planning to travel to reunite with loved ones over the next six months. Alternatively, 41% plan to spend less on vacation travel during the holidays because rising fuel costs are making travel more expensive.
Consumers are holding on to their values into the new year
Resilient consumers are not giving up their desire for sustainable living during the holidays and are instead turning to more cost-effective ways of achieving them. Whether buying fewer physical goods (42%) or shopping locally (30%) and choosing gifts with less packaging (40%) – shoppers are taking control by optimizing for both economic and environmental benefits.
“Consumers see the festive season as an important opportunity for them to positively express their social values, in what they buy and how they bring people together,” explains Elliot Morris, EY Canada Grocery and Consumer Packaged Goods Leader. “With more income now required just to cover the essentials, consumers increasingly want to make informed decisions about the products they purchase and are looking for more information from trusted sources to support that.”
With environmental concerns rising, Canadians are looking for ways to reduce consumption. Over a quarter will purchase less food and alcohol for celebratory meals to avoid waste and 44% plan to use less festive lighting and decorations at home to save energy. Notably, 70% of consumers across Canada don’t feel the need to keep up with the latest fashion trends and over half don’t feel the need to keep up with the latest gadgets and technologies. When it comes to purchase criteria, 42% report they now care more about the usefulness and longevity of the products they buy.
“As consumers bring fresh values into this shopping season and into 2023, saving consumers money and driving sustainable efforts should go hand-in-hand for retailers looking to bridge the gap between action and intention,” adds Morris.
To learn more about the EY Future Consumer Index, click here.