Canadians are planning to be more frugal in their Christmas spending this year, down 7.5% compared to last year, according to a new survey by Field Agent.
Results from the mobile research firm’s 2014 survey showed Canadians planned to spend 7.2% less versus the previous year.
This year’s survey of more than 2,000 Canadians found Newfoundland has the highest average holiday spending, at $1,250. But, people in the province are planning to cut back the most, down 27% versus the previous year. Other big cutbacks in holiday spending are expected in Manitoba (-12.5%) and Alberta (-10.6%).
“It’s tied to the economic reality in those areas,” said Jeff Doucette, general manager of St. John’s, Nfld.-based Field Agent Canada. While the survey didn’t ask consumers why they’re spending less, “there’s a pretty direct correlation to what you’re hearing in the news about those regions.”
“For us in Newfoundland, you see a lot of Alberta license plates—people who are back home now because they’ve lost their job in Alberta,” said Doucette. “And times are tightening up because of the offshore oil industry here as well. Being a retailer in Newfoundland is going to be a little bit tough this Christmas versus some of the more stable markets.”
While declines in spending are expected in every province across Canada, the cuts are less drastic in Prince Edward Island (-2%), Saskatchewan (-1.8%) and British Columbia (-0.7%). The expected declines in spending in the other provinces are: Nova Scotia: -10%; New Brunswick: -9.5%; Ontario: -6.7%; and Quebec: -8.5%.
Consistent with the 2014 results, the lowest planned spending was reported by residents of Quebec at just $645, which is 26% less than the national average.
So how can retailers get Canadians to open their wallets this Christmas? Doucette said they “need to get that gift in the basket as early as possible in the year because when the money runs out, it’s gone.”
“If I’m a retailer, by November 1 I’m going big on Christmas and I’m going to be all over Black Friday. And I want to get that dollar now versus waiting for it in the last week before Christmas.”
In stores, retailers should have gifts that are easy to find and organized by price in a range of budgets, say from $10 to $100, said Doucette.
“One of the really simple, but innovative strategies that I’ve seen over the last couple of years is solution selling to a price point,” he said. “At the end of the day, people want the holidays to be merry and bright, and they want to find a solution in stores.”
Retailers that adapt this strategy just might be able keep the Grinch away. “Once you have someone in the $25 section, if there were gifts right next to it for $35, you might be able to pull another $10 out of their pocket once they’re in your store,” said Doucette.
“Retailers that can provide a ‘good, better, best’ strategy might be able to trade some people up in store. But, they’re going to need to draw people in with that lower price point to get them in the door.”
