High inflation has caused Canadians to count their pennies far more than usual this year, forcing retailers to convince them to have a tougher-than-ever holiday season.
Friday marks the unofficial start of the holiday shopping season, as American-style Black Friday sales are now firmly entrenched in Canada as well.
However, the windfall in annual spending is different this year, as experts say that although there are more deals than usual, they come against a backdrop of more cost-conscious consumers than ever.
“This is the year of the cut, it really is,” retail consultant Bruce Winder said in an interview. “Consumers have shown that they are frugal, that they are greedy this year and that they will only buy when there are sales.”
Too much product
Excess inventory levels are a major reason discounts may be larger than usual this year.
At the start of the pandemic, retailers struggled with supply chain issues that led to empty shelves in many product categories. But Winder says the pendulum has swung the other way now, as many retailers have far more inventory to move than they normally would at this time of year – prompting them to cut it deeper. and sooner than they normally would.
“It’s gone from being out of stock to being overstocked in certain circumstances, but that bodes well for consumers,” Winder said.
Elliot Morris, head of grocery and consumer packaged goods at EY Canada, says retailers are caught between a rock and a hard place. “As the economy slows, there are areas of inventory that have clearly piled up at retailers,” he said. “As we move through the rest of the holiday season, if this inventory continues to hang on shelves…you’ll see deeper discounts.”
Retailers themselves are acutely aware that customers are more demanding than ever this year, prompting new names to enter the Black Friday game.
Melissa Austria runs GotStyle, a unisex clothing store in Toronto. She doesn’t usually have general sales this time of year, but today her store will be offering suits and sports jackets for 50% off.
“We’re noticing that we need to bring things that are a little more price sensitive for the everyday casual shopper who wouldn’t normally shop here,” she told CBC News in an interview. “The more casual shopper who wouldn’t normally buy a high-priced item is definitely holding back a bit.”
Michelle Wasylyshen of the Retail Council of Canada says she’s optimistic about the outlook this year, but it’s clear pricing will be the biggest consideration.
“I think everyone is worried about a slowing economy, but it seems like consumers are still spending, they’re just spending more wisely,” she told CBC News in an interview.
On the streets of Toronto, customer Pradheepa Simonpillai says she plans to spend less than she normally would over the holiday season, even with a young child to support.
“I don’t buy anything unless absolutely necessary,” she said. “I’m going to find really creative ways not to spend money this season.”
Another shopper, Amir Ali, says he plans to go shopping on Friday precisely because he thinks there will be deals to be had.
“You just have to make different decisions [but] I’m always going to look for gifts for the kids and stuff like that,” he said.
Annie Titheridge also plans to brave the crowds this year because she likes being able to touch and smell products before she buys them, something she can’t do with online shopping.
“My husband and daughter think I’m crazy for shopping on Black Friday,” said Titheridge, who will be driving from King City north of Toronto to Yorkdale Mall for the day. “But if the offers are good and something jumps out at me, what can I do? »