In the face of rising costs and declining consumer confidence, it’s not surprising that consumers are planning to spend less this holiday season. While projected spend has declined across all generations, the year-over-year change is most notable among Gen Z consumers and millennials.
At the same time, changes to the relationship between Canada and the United States are also significantly shaping spending intentions this year. Despite planning to make cutbacks, almost half of Canadians are willing to purchase more expensive Canadian-made products. They’re also focusing on in-store shopping experiences at every stage of their holiday shopping journey.
In short, Canadian consumers are set to make every dollar and holiday moment count this holiday season. To better understand what matters most to shoppers, we surveyed 1,020 Canadian consumers late this summer. Below is an excerpt of what they told us.
Canadian holiday spending intentions – and cutbacks
Canadian consumers plan to spend an average of $1,675 on gifts, travel and entertainment this holiday season. While this is a 10% decrease from last year, it represents a 2% increase from 2023 spending intentions. If we remove a few anomalous years from the last decade, including several during the pandemic, this projected spend is roughly in line with what we would expect from an inflationary perspective.
Nonetheless, as wallets are tightening, Canadians will be making hard choices about where to spend their money. Slightly over eight out of ten (81%) of respondents are considering cutting back to save money over the next six months. While they don’t plan to cut spending on family members, they do plan to cut on gifts for friends, pets and themselves compared to last year.
Younger generations reshaping the retail landscape
While projected spend across all generations has declined, it’s most notable among Gen Z and millennials. Gen Z consumers are planning to spend 34% less this year, and millennials are expecting to spend 11% less.
These spending intention drops show us how deeply individuals in these demographics are exposed to economic uncertainty. More Gen Z consumers have entered the workforce and set up their own residences. Many millennials have now had children, are early into mortgages and could be affected by job losses.
Elbows up: Canadians showing marked loyalty to Canadian products
Changes to the Canada-US trade relationship and political landscape have resulted in a significant shift in this year’s survey findings. Almost half of respondents (49%) say when buying holiday gifts, they would choose a product made in Canada that costs more if two products have a similar look, feel and quality.
Compare this with findings from a consumer survey we conducted in early 2025. At that time, only 38% of Canadians said they’d choose a more expensive domestic product over a lower-priced imported equivalent when grocery shopping.
In-store holiday moments still close to consumers’ hearts
Year after year in this consumer survey, we ask questions about in-store shopping versus online. The results continue to tell the same story: In-store shopping is an integral part of the holiday experience for many. The tactile element of in-person shopping continues to be key, with the highest number of respondents (56%) ranking the ability to see and touch products as a factor that influences their decision to visit physical stores during the holiday season.
Spotlight on the AI opportunity for retailers
When it comes to addressing issues with holiday purchases or travel bookings, respondents of all ages show a strong preference for speaking directly with customer service agents instead of artificial intelligence (AI) assistants.
For example, to deal with a disruption related to a higher-value item, 73% of consumers rank speaking with a customer agent by phone in their top three preferences. Only 9% include using an AI assistant or chatbot on the retailer website in their top three.
Strategies for retailers this holiday season
Despite current economic challenges, there will be significant opportunities for retailers in the coming months. Critical areas of focus highlighted by our survey results include personalized marketing strategies, competitive pricing, in-store experiences and technology.
By focusing on consumer-centric strategies, retailers can create the vibrant and engaging shopping moments customers are looking for over the holiday season – and beyond.
To learn more about the consumer preferences and behaviour trends shaping the holiday shopping season, read the full report here.
Originally published on PwC.com.
