Getaways displacing gifts this Christmas, forecast find
Walking into a Canadian retailer this time of year feels exactly like being swallowed by a Christmas parade float – all garland tongues, gingerbread breath and tinsel tonsils. But are shoppers buying what stores are selling? Unless they’re inside a travel agency, the answer appears to be a firm “meh.” According to BMO’s 2013 Holiday Spending Outlook, to be released Wednesday, gift purchases in Canada will be relatively flat this season, rising a scant 0.6 per cent over last year to reach $678. Instead, Canadians are allocating a larger share of money to getaways, which are forecast to rise 22 per cent over 2012, and nearly double what was spent in 2011: $689 versus $360. “We’re seeing different ways of giving,” said Laura Parsons, a BMO personal finance expert. “There’s a switch to going on trips as a family, instead of doing gifts.” Overall, seasonal spending is projected to be up for the third Christmas in a row, rising to $1,810 from $1,610 in 2012 and $1,397 in 2011. But Parsons cautions that money is being distributed differently than in the past. Across the country, consumers are wising up to deals, with the expected use of loyalty rewards for holiday purchases up 32 per cent over 2012. People are increasing their family travel allowance instead of putting more money toward traditional gifts. And in terms of setting a fixed budget, the share of Canadians professing to do so is up seven points, to 36 per cent. “There are a lot more thrifty buyers who are really doing their homework before they spend,” said Parsons, who is based in Calgary. “You do not want that Christmas aftermath that carries through to the summer months.” But Grinches we are not, with most Canadians getting into the spirit in one way or another. Starbucks alone, for example, is expected to sell enough holiday drinks — think peppermint mochas and eggnog lattes — to ice more than 812 curling sheets. Parsons said the take-home message, simply, is that shoppers aren’t going to go crazy. Independent surveys for Deloitte and Ernst & Young arrived at similar conclusions, with each forecasting a conservative Christmas spend (modest year-over-year increases of two to 3.5 per cent), while a third survey for Google Canada predicted a drop in the average gift budget, from $711 to $629. The BMO report is based on a Pollara survey of 1,215 randomly sampled adult Canadians, conducted between Oct. 11 and 16. Results are considered accurate within 2.8 percentage points, 19 times out of 20. Read More...
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