The global economic downturn may have rattled consumer confidence, but a new survey suggests many Canadians do not plan to cut their spending this holiday season.
Just over half (51 per cent) of responders to a survey by the financial advisory firm Deloitte said they plan to spend the same amount as in the past two years.
Meanwhile, 44 per cent planned to spend less, up by three per cent over last year’s survey, suggesting little change in consumers’ spending intentions.
What could change, however, is how and where the holiday dollars will be spent.
Consumers only plan to spend 26 per cent of their holiday budget on gifts for others. The rest of the money will be spent on items for themselves and their families, according to the survey released Thursday.
Twenty-one per cent will go to home improvements, which could be attributed to the 2009 federal home improvement tax credit, and 28 per cent spent on socializing and entertaining.
The rest of the spending would go to clothing (nine per cent), home furnishings,(eight per cent), and charitable donations, (eight per cent.)
The survey also suggests that this holiday season Canadians will continue to scan for value and hunt for bargains.
“Based on this year’s results, retailers should brace for a wave of shoppers later in December, as Canadians will delay purchases until there are substantial mark downs,” said Brent Houlden, national retail practice leader at Deloitte.
But a surging loonie is adding pressure on Canadian retailers to lower prices at a time when they can least afford it.
If they don’t, consumers will once again start heading south where American retailers are advertising deeply-discounted prices directly to Canadians.
In the Greater Vancouver area, for example, more than 30 per cent of respondents indicated they were likely to travel south for their holiday shopping.
The survey also suggests that regional differences could impact spending.
Job security, always a factor in shoppers spending decisions, varies significantly from coast-to-coast, with 81 per cent of respondents feeling at least somewhat secure in the greater Vancouver and Toronto areas, 89 per cent in the greater Montreal area and 93 per cent in Atlantic Canada.
According to the survey, Toronto and Montreal residents plan to spend 25 per cent and 28 per cent respectively more on home improvements than other Canadians and more than any other category.
Meanwhile, Vancouver residents plan to spend 32 per cent of their holiday spending on socializing and entertaining.
And Atlantic Canadians plan to spend more of their holiday dollars – 33 per cent – on gifts than other Canadians and more than any other category.
Gift certificates and gift cards top the list of the most popular gifts this year, followed by clothing, food and liquor, books, CDs and DVDs, toys, money, cosmetics, computers and video games and jewelry.
The survey, conducted between Sept. 24 and Sept. 30, 2009, polled a sample of 2,180 individuals and has a margin of error of plus or minus five percentage points.