November 11, 2008 08:00 ET

Deloitte Predicts Holiday Spending Levels to Match or Slightly Better Last Year's Results

Yet current economic volatility requires Canadian retailers to be creative and savvy in order to drive sales traffic this holiday season

TORONTO, ONTARIO--(Marketwire - Nov. 11, 2008) - While a majority of respondents (53%) plan to spend the same amount on holiday shopping as they did in 2007, 40% report that they will spend less this year (versus 25% last year), according to Deloitte's Annual Holiday Survey of retail spending and trends. Shoppers in the Greater Vancouver and Toronto areas are the most likely to decrease holiday spending this year, as compared to the national average (45% and 46% respectively).

"It may sound strange, but we view these results positively and believe that Canadian retail sales this year will be higher than last year", says Brent Houlden, Deloitte's national practice leader for Retail. "Consumers always spend more than they intend during the holiday season, and with Canadians currently enjoying lower gas prices they'll have a little more cash in their wallets. But, Canadian retailers will have to work hard to earn that holiday spend, as consumers will be scanning for value and hunting for bargains."

Shopping for bargains this holiday season

How and where consumers will shop will play a key role in this year's holiday shopping activity. Across the country, 83% of consumers are planning to buy more items on sale - that figure rises to 86% in Atlantic Canada and 88% in the Greater Toronto Area. In terms of receiving gifts, most respondents report not having that 'must-have' gift this year, which supports the trend reported by 57% of respondents to change the way they shop this year, as they now focus on bargains and home essentials.

Holiday shoppers will also take the drop in the value of the Canadian dollar to forego cross border shopping. In fact, the survey found that only 41% of shoppers now plan to shop south of the border, down from 64% in 2007.

"Compared to last year, when the Canadian dollar was at, or above par leading up to the holiday season, we expect to see a significantly lower number of Canadians spending their holiday budget south of the border this year, which will help out our Canadian retailers," says Houlden.

What's hot this holiday season

Almost two-thirds (65%) of Canadians plan to buy gift cards this holiday season - that figure rises in the Greater Toronto Area (71%) and Atlantic Canada (74%). While many retailers and consumers see gift cards as a gift of choice, 28% of respondents said they've had at least one gift card expire before it could be fully redeemed. This year, Canadians in Alberta, Manitoba and Ontario will not have to worry about expiry dates as these provinces have banned expiration dates on gift cards.

The environment and green products have been prominent on the minds of consumers throughout the year. The survey found that slightly more than half (52%) of Canadians are willing to spend more for an environmentally-friendly gift, and roughly half of those respondents would pay no more than 10% extra.

Top 10 Gifts for 2008 (versus 2007)

1. Gift certificates/cards Clothing
2. Clothing Gift certificates/cards
3. Books CDs or DVDs
4. Food/liquor Books
5. CDs or DVDs Food/Liquor
6. Traditional toys Traditional toys
7. No gift (cash or cheque) Cosmetics and fragrances
8. Cosmetics and fragrances Electronics
9. Computer/video games Computer/video games
10. Jewelry Jewelry

Survey results also show that holiday online buying will be less popular than in previous years, with the majority of respondents (63%) indicating that they do not plan to make any holiday purchases via the web. To compare, 46% of Vancouver respondents will buy more online, while 68% of Montreal respondents do not plan to buy anything online.

About the Deloitte survey

The survey was commissioned by Deloitte and conducted online across Canada by an independent research company between September 29 and October 9, 2008. The survey polled a sample of 2,847 individuals and has a margin of error for the entire sample of plus or minus 5 percentage points.

About Deloitte

Deloitte, one of Canada's leading professional services firms, provides tax, audit, consulting, and financial advisory services through more than 7,600 people in 56 offices. Deloitte operates in Quebec as Samson Belair/Deloitte & Touche s.e.n.c.r.l. The firm is dedicated to helping clients and its people excel. Deloitte is the Canadian member firm of Deloitte Touche Tohmatsu.

Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, and its network of member firms, each of which is a legally separate and independent entity. Please see for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its Member Firms.

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