Black Friday sales may be more muted than typical years as price-weary consumers deal with high inflation and tighter budgets during a turbulent year shadowed by fears of recession.
“We shopped way more last year. It’s all the talk about recession coming and the cost of living increases,” shopper Brynna Aylward said as she walked out of the Eaton Centre Friday.
The mall appeared to be crowded in the late afternoon as the holiday shopping period got its unofficial green light.
“We just overdid it last year. We’ve done Black Friday for years,” said Linda Aylward. “Our income stream is changing because this is a year where we’re retiring and so that’s another reason why it’s going to be slimmed back this Christmas.”
Black Friday and Cyber Monday are considered landmark days on the shopping calendar that can set the tone for crucial retail weeks.
But then there is inflation.
“Things that were $100 last year might be $120 this year,” said Linda. “And that difference adds up.”
In its annual survey of consumer intentions this time of year, the Retail Council of Canada (RCC) found shoppers are eager to get back to in-person shopping.
“Consumers are definitely worried about inflation and finances but they told us they still plan to celebrate the holiday season,” said Michelle Wasylyshen, of RCC. “In fact, they’re going to be spending – nationally – about the same as they did last year.”
That average spending is about $790.
This week’s review of how much Canadians spent in September was down slightly – by 0.5% – to $61.1 billion.
“It looks like consumers did tighten their belts a little bit in the early fall. But our holiday shopping survey does show that they intend to spend some money, they intend to shop. They will just do so a little bit differently,” said Wasylyshen.
Economists say persistent inflation and the rapid rise of interest rates – which may jump again Dec. 7 – will continue to influence the mood and behavior of shoppers.
“Indeed, the most likely reason is that consumers are starting to tighten their purse strings, under the weight of financial headwinds: high inflation, rapidly rising interest rates and shrinking wealth,” wrote Ksenia Bushmeneva, Economist, TD Economics, in a research note on this week’s retail results.
“Higher debt servicing costs are expected to hit household finances hard over the remainder of this year, and will remain a challenge next year as well, pointing to significantly weaker consumer spending in 2023.”
Twitter: @_ScottLaurie
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