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BMO Bank of Montreal

BMO Bank of Montreal

November 24, 2010 09:00 ET

REPEAT-BMO Holiday Spending Outlook: How and When Canadians Will Spend During the Holidays

- BMO Bank of Montreal report released on the eve of Black Friday-the busiest day of the holiday shopping season south of the border

- Nearly half (48 per cent) of Canadians plan to spend less this holiday season than two years ago, with entertaining taking a back seat to gifts and travel

- 51 per cent of Canadians begin holiday shopping weeks in advance, while 14 per cent of Canadians consider themselves 'last minute shoppers'

TORONTO, ONTARIO--(Marketwire - Nov. 24, 2010) - Canadians are getting a jump start on their holiday shopping and plan to spend nearly three times as much on gifts compared to entertaining with family and friends, according to the BMO Holiday Spending Outlook. The report hits on the eve of Black Friday – the busiest shopping season in the U.S. and considered a barometer for holiday retail sales in North America.

The survey showed that 51 per cent say they begin their holiday shopping weeks in advance, while 14 per cent scramble with only days left, with men twice as likely as women to be 'last minute shoppers'.

"Like any other kind of purchase, large or small, the key to keeping your holiday shopping and spending under control is planning," said Su McVey, Vice President, BMO Bank of Montreal. "Putting a budget in place ahead of schedule will help to ensure you can still keep other daily and monthly expenses on track."

While holiday shopping appears to be ramping up early, the survey also showed that nearly half of Canadians plan to cut back on holiday spending, with 48 per cent expecting to spend less than they did when the recession set in two years ago. 

Furthermore:

  • The majority estimate their holiday budget will peak at $1,300
  • Gift purchases will account for the bulk of the expense ($613.50), followed by trips ($356.50), entertaining ($203.80), and other expenses ($131.80).

"Despite low interest rates, the holiday shopping season this year will be a somewhat more subdued affair than last year, though sales growth should remain healthy," said Sal Guatieri, Senior Economist, BMO Capital Markets. "Whereas retail sales rose a strong 4.3 per cent in November/December of 2009 from the same period in 2008, sales are expected to grow a somewhat more moderate 4 per cent this holiday season."

Of those surveyed, 60 per cent plan to use cash or debit for the majority of their purchases, while another 53 per cent claim their holiday spending will be done with credit cards. Another 31 per cent plan to take advantage of rewards, such as AIR MILES, to cover off their gift lists.

Additional highlights include:

  • 20 per cent say they will be spending more than they did two years ago
  • Those in Quebec tend to spend the least amount of money on gift purchases ($468.40) when compared to the Atlantic provinces ($784.70), Alberta ($680.20), Ontario ($665.70), and B.C. ($622.20)
  • Men are more likely than women to plan on spending more this holiday than they did two years ago (24 per cent versus 16 per cent)
  • One-quarter say they budget all year for the holiday season 

To help shoppers make sense of their money, avoid overspending and save more this holiday season, BMO Bank of Montreal offers the following tips:

  • Get a Head Start – According to the survey, 30 per cent of Canadians start their shopping months before, while 14 per cent consider themselves last-minute shoppers. By waiting until the last minute, you risk over-spending and sometimes missing out on the gifts at the top of your list. Get your shopping started early to ensure you stay on track and keep holiday stress levels down!

  • Set a Budget and Stick to It – The proof is in the Christmas pudding. One in four Canadians budget all year for the holiday season, and of this group, 69 per cent say they generally stick within their holiday budget. Build your budget as early as possible and revisit it often to lessen the impact of the holiday spending surge.

  • Spend Smart – Get the most out of your purchases this holiday season by using a credit or debit card that offers rewards for purchases at multiple retail locations. Combine this with programs such as the AIR MILES Reward Program to accelerate your rewards earnings by allowing you to double dip, essentially earning rewards twice on the same purchase.

For more tips on budgeting, planning and spending smart this holiday season, please visit BMO SmartSteps at www.bmo.com/smartsteps.

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