It’s Black Friday, and Canadian shoppers have joined the born-in-the-U.S. retail frenzy to hunt for deals. But amid the heavy weight of inflation, shoppers are showing signs of being choosier than usual about where to spend their holiday shopping dollars.
Data from Statistics Canada shows a clear trend that spending has slowed in recent months, with sales volumes dropping every month since June. September numbers are due out on Friday morning, but an estimate from last month suggested it was on track to be flat yet again.
Economists like RBC’s Carrie Freestone say they can see the slowdown playing out in real time as consumers adjust their budgets. Data from the bank’s consumer spending tracker, which tracks anonymized debit and credit data from RBC’s millions of clients, shows people are spending about 10 per cent more on essentials than at this time last year.
“That’s groceries, gasoline, phone bills and utilities,” Freestone told CBC News in an interview.
Spending is up in those categories mostly because it has to be. But instead of being a sign of splurging, families are offsetting by cutting back anywhere they can.
“You still have to cook dinner for your kids, and you still have to drive them to school,” Freestone said. “Things you obviously can’t substitute away from, that’s where consumers are really getting hit.”
RBC economist Carrie Freestone says spending on essentials like food and utilities is up about 10 per cent from a year ago. (Shawn Benjamin/CBC)
Instead, consumers are starting to pull back on spending on services, “because these are areas of spending that are more sensitive to higher rates,” Freestone said.
“We’re seeing fewer vacations being booked, and restaurant spending is definitely down,” she said.
Consumers being choosy
Big box retailer Staples Canada doesn’t sell either beach vacations or nights out, but it’s still keenly aware that consumers are being choosier than usual this year.
“We know customers are working hard for their money. They’re being intentional about how they spend their money. So what we’re trying to do is give them options from end to end, across all price ranges,” said Rachel Huckle, president and chief operating officer of Staples Canada, in an interview with CBC News.
Staples is one of many retailers that participate in Black Friday sales, but it is doing things a little differently this year. They rolled out planned sales at the start of November and promised customers they don’t have to worry about prices going down even more between now and Christmas.
Huckle said even with consumers watching their pennies, there’s still strong demand for things like tech and gadgets.
“People are stretching their wallets even further, and they’re having to make trade-offs,” she said.
WATCH | Holiday shoppers are cutting back amid high inflation:
Inflation takes a bite out of holiday shopping budgets
24 hours ago
Duration 1:24
Featured VideoShoppers at Sherway Gardens in Toronto tell CBC News how their holiday spending plans have changed this year, as family budgets adjust to the current era of high inflation.
That sentiment is being clearly expressed from shoppers themselves.
Rohit Sahu was browsing the shops at Toronto’s Sherway Gardens mall this week. He said he’s more aware now of how he spends every dollar. “Everything’s so expensive that you’re just cutting costs and trying to … be low-key and save money,” he said.
He said he’s a window shopper because nothing has met his high bar for what qualifies as a bargain right now. “The deals are good, but still not affordable for us.”
Maream Kamil said she hasn’t changed her budget for treating herself but said her money isn’t going as far as it used to.
“Before you would walk out with three tops and it was $100,” she said. “Now it’s a one-for-$100 kind of thing.”
TORONTO – Restaurant Brands International Inc. reported net income of US$357 million for its third quarter, down from US$364 million in the same quarter last year.
The company, which keeps its books in U.S. dollars, says its profit amounted to 79 cents US per diluted share for the quarter ended Sept. 30 compared with 79 cents US per diluted share a year earlier.
Revenue for the parent company of Tim Hortons, Burger King, Popeyes and Firehouse Subs, totalled US$2.29 billion, up from US$1.84 billion in the same quarter last year.
Consolidated comparable sales were up 0.3 per cent.
On an adjusted basis, Restaurant Brands says it earned 93 cents US per diluted share in its latest quarter, up from an adjusted profit of 90 cents US per diluted share a year earlier.
The average analyst estimate had been for a profit of 95 cents US per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 5, 2024.
ST. JOHN’S, N.L. – Fortis Inc. reported a third-quarter profit of $420 million, up from $394 million in the same quarter last year.
The electric and gas utility says the profit amounted to 85 cents per share for the quarter ended Sept. 30, up from 81 cents per share a year earlier.
Fortis says the increase was driven by rate base growth across its utilities, and strong earnings in Arizona largely reflecting new customer rates at Tucson Electric Power.
Revenue in the quarter totalled $2.77 billion, up from $2.72 billion in the same quarter last year.
On an adjusted basis, Fortis says it earned 85 cents per share in its latest quarter, up from an adjusted profit of 84 cents per share in the third quarter of 2023.
The average analyst estimate had been for a profit of 82 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 5, 2024.
TORONTO – Thomson Reuters reported its third-quarter profit fell compared with a year ago as its revenue rose eight per cent.
The company, which keeps its books in U.S. dollars, says it earned US$301 million or 67 cents US per diluted share for the quarter ended Sept. 30. The result compared with a profit of US$367 million or 80 cents US per diluted share in the same quarter a year earlier.
Revenue for the quarter totalled US$1.72 billion, up from US$1.59 billion a year earlier.
In its outlook, Thomson Reuters says it now expects organic revenue growth of 7.0 per cent for its full year, up from earlier expectations for growth of 6.5 per cent.
On an adjusted basis, Thomson Reuters says it earned 80 cents US per share in its latest quarter, down from an adjusted profit of 82 cents US per share in the same quarter last year.
The average analyst estimate had been for a profit of 76 cents US per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 5, 2024.
