Consumers aim to stick to budget while shopping more in-store to support local businesses
TORONTO, Nov. 15, 2022 (GLOBE NEWSWIRE) -- Consumers are certainly feeling the pinch leading into Black Friday according to new survey data* from Equifax Canada. Six-in-ten (60 per cent) say financial pressures due to inflation mean they will be spending less on gifts this holiday season, and 41 per cent say they will limit their holiday spending because they are already carrying too much debt, up from 36 per cent last year.
Coming out of pandemic restrictions over the past two years, only 12 per cent believe they will spend more this year. Of the younger adult age group (18-34), 23 per cent say they are more likely to increase their spending versus only 4 per cent of those aged 55 and over. Fortunately, the survey also found that 57 per cent of consumers plan to prepare a budget for holiday shopping.
“Whether you’re spending more or less, it’s very important to go into holiday shopping with a well thought out budget,” said Julie Kuzmic, Equifax Canada’s Senior Compliance Officer, Consumer Advocacy. “Inflation is adding pressure to the financial situations of Canadians. Preparing and sticking to a budget may help make those credit card bills a little easier to face in January.”
SHOPPING LOCAL PART OF THE PLAN FOR HOLIDAY SHOPPERS
To help support local businesses this holiday season, 61 per cent of survey respondents say they plan on doing more in-store shopping, an increase of 10 percentage points compared to last year. Many are planning to take advantage of Black Friday, Cyber Monday, and/or Boxing Day sales (50 per cent, 47 per cent, and 41 percent, respectively).
Equifax Canada also conducted a survey** of 300+ small business owners, 25 per cent of whom said they are feeling more confident about the 2022 holiday season compared to the one in 2021. This is a significant decline from last year, when 36 per cent felt more confident about the holiday season of 2021 versus that of 2020.
“Inflation and supply chain concerns are affecting the confidence of small business owners leading up to the holiday season,” said Jeff Brown, Head of Commercial Solutions, Equifax Canada. “Businesses need suppliers to ensure product availability, first and foremost, while they try to keep prices reasonable in the wake of rising costs. The biggest thing consumers can do to help small business owners is continue to purchase products from them.”
In an Equifax survey of small business owners conducted in 2021, 54 per cent said their main wish for customers was that they would continue to purchase goods or services from them. That figure has skyrocketed to 72 per cent when thinking about the holiday season this year.
PAYMENT METHODS
Credit cards remain the preferred payment method for Canadian consumers. Two-thirds of survey respondents (65 per cent) noted they use their credit card more often than cash, especially those earning more than $60K a year (77 per cent versus 53 per cent of those making less than $60K). Three-in-ten (27 per cent) use more than one credit card for holiday purchases, but this percentage climbs to 32 per cent among households making at least $60K per year.
HOLIDAY DEBT HIGHER AMONG YOUNGER CONSUMERS
Roughly three-in-ten of consumers surveyed believe that they end up carrying the most credit card debt during the holiday season (27 per cent), and that it takes them at least a month — if not longer — to fully pay off their holiday purchases (31 per cent). Once again, this is particularly true for the younger adults (18-34) polled, with 37 per cent carrying most of their credit card debt during the holiday season and 41 per cent needing a month or more to pay for their purchases. Additionally, 30 per cent of younger adults say they end up regretting many of their holiday purchases once their credit card bills arrive, versus the consumer average of 19 per cent.
PROTECTING AGAINST FRAUD AND IDENTITY THEFT
When they receive their credit card bills each month, eight-in-ten (82 per cent) consumers check their statement for fraudulent activity, down from 87 per cent in 2021. Four-in-ten (39 per cent) agree that they feel more vulnerable to fraudsters and identity thieves during the holidays, while over three-quarters (77 per cent) disagree that identity theft happens to other people and is unlikely to happen to them.
“Fraudsters can prey on anyone — including people who don’t think it can happen to them,” said Kuzmic. “It’s important to be vigilant, especially around the holidays when we tend to pull out our credit cards more often.”
*An online survey of 1,006 Canadians was completed between October 6-17, 2022, using Leger’s online panel. The margin of error for this study was +/-2.5%, 19 times out of 20.
** Equifax Canada commissioned Leger to conduct an online survey with 301 Canadian small (260) and medium-sized (41) business owners/leaders/decision makers within the Food, Construction, Retail, and Travel Industries. It was completed between August 29 and September 14, 2022, using Leger’s online panel.
About Equifax
At Equifax (NYSE: EFX), we believe knowledge drives progress. As a global data, analytics, and technology company, we play an essential role in the global economy by helping financial institutions, companies, employers, and government agencies make critical decisions with greater confidence. Our unique blend of differentiated data, analytics, and cloud technology drives insights to power decisions to move people forward. Headquartered in Atlanta and supported by more than 14,000 employees worldwide, Equifax operates or has investments in 24 countries in North America, Central and South America, Europe, and the Asia Pacific region. For more information, visit Equifax.ca.
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