Consumers making every dollar and holiday moment count

Key findings

• Canadian consumers are planning cutbacks over the next six months; while they won’t reduce spending on family, they will spend less on friends and themselves.

• The divide between younger and older generations is widening, with younger consumers set to spend less and expect more from a digital perspective.

• Almost half of Canadian consumers are willing to pay more for products made in Canada and are less likely to cross-border shop than last year.

• In-store and in-person experiences matter: Many consumers plan to purchase in store and prefer to interact with humans over artificial intelligence assistants.

In the face of rising costs and declining consumer confidence, it’s not surprising that consumers are planning to spend less this holiday season. While projected spend has declined across all generations, the year-over-year change is most notable among Gen Z consumers and millennials.

At the same time, changes to the relationship between Canada and the United States are also significantly shaping spending intentions this year. Despite planning to make cutbacks, almost half of Canadians are willing to purchase more expensive Canadian-made products. They’re also focusing on in-store shopping experiences at every stage of their holiday shopping journey.

In short, Canadian consumers are set to make every dollar and holiday moment count this holiday season. To better understand what matters most to shoppers, we surveyed 1,020 Canadian consumers late this summer. Here’s what they told us.

Canadian holiday spending intentions—and cutbacks

Canadian consumers plan to spend an average of $1,675 on gifts, travel and entertainment this holiday season. While this is a 10% decrease from last year, it represents a 2% increase from 2023 spending intentions. If we remove a few anomalous years from the last decade, including several during the pandemic, this projected spend is roughly in line with what we would expect from an inflationary perspective.

Nonetheless, as wallets are tightening, Canadians will be making hard choices about where to spend their money. Slightly over eight out of ten (81%) of respondents are considering cutting back to save money over the next six months. While they don’t plan to cut spending on family members, they do plan to cut on gifts for friends, pets and themselves compared to last year.

They’re also showing a decreased preference for credit card use and an increased preference for debit cards compared to last year. This is likely in an additional effort to curb spending.

Consumers are being savvy about when they’re going to do most of their holiday shopping. Consistent with last year, nearly one-third (32%) intend to do most of their shopping across the Black Friday weekend (including Cyber Monday). However, there’s a 9% drop among those planning to shop between Thanksgiving and Black Friday compared to 2024. Presumably, many of these shoppers are intending to take advantage of promotions running from Black Friday onwards this year.

Younger generations reshaping the retail landscape

While projected spend across all generations has declined, it’s most notable among Gen Z and millennials. Gen Z consumers are planning to spend 34% less this year, and millennials are expecting to spend 11% less.

These spending intention drops show us how deeply individuals in these demographics are exposed to economic uncertainty. More Gen Z consumers have entered the workforce and set up their own residences. Many millennials have now had children, are early into mortgages and could be affected by job losses.

At the same time, Gen Z consumers and millennials are consistently expressing different needs and values from their older counterparts. Many younger consumers have heightened awareness of brands, and they value brand stories and transparency on sustainability. They also exhibit greater inclination to use digital services. For example, when holiday shopping, 44% of Gen Z consumers plan to use self-checkout technology, compared to 31% of consumers overall. Gen Z consumers and millennials are also more likely to plan to use mobile payment solutions (44% and 41%, respectively, compared to 29% of overall consumers).

To attract and capture these consumers, retailers will need to shift their strategies now—if they haven’t already. 

Retailers must ask themselves: Are we being surgical enough in our strategies to capture clients for life? Do we have products in our assortment that relate to what younger customer segments want, and is it easy for shoppers to locate these products? Are we using personalization for these consumers and communicating our value to them through the right media channels? To interest younger generations will require a stronger focus on trends and different channels, including social media.

Elbows up: Canadians showing marked loyalty to Canadian products

Changes to the Canada-US trade relationship and political landscape have resulted in a significant shift in this year’s survey findings. Almost half of respondents (49%) say when buying holiday gifts, they would choose a product made in Canada that costs more if two products have a similar look, feel and quality.

Compare this with findings from a consumer survey we conducted in early 2025. At that time, only 38% of Canadians said they’d choose a more expensive domestic product over a lower-priced imported equivalent when grocery shopping.

This difference becomes starker at the generational level. Almost two-thirds (64%) of baby boomers say they’d choose a more expensive made-in-Canada product this holiday season. Gen Z respondents tend to be more cost-conscious, likely due to their compressed discretionary budgets, and 62% say they’d opt for the cheaper product made outside of Canada.

We see further evidence of Canada-first sentiment in the reduction in people planning to cross-border shop this holiday season. Only 12% of respondents plan to physically visit the United States to cross-border shop, an eight percentage-point drop from the 20% of respondents who planned to do so last year. Those who are cross-border shopping tend to be younger and more digitally inclined. However, with changes to the de minimus rules (announced after our survey closed) now in effect, the number of younger consumers shopping cross-border online will likely drop as well.

What should retailers do with this information? Canadian consumers want to buy from Canadian retailers, so retailers should make it easy for them to do so. Canadian retailers need to keep their eye on competitors across the border and how they’re pricing and promoting goods. They also need to be able to make changes quickly from a pricing and promotion perspective to stay competitive.

Canadian retailers also need to understand what their current customers are buying in the United States—and why they’re choosing to buy those items there. They should react by ensuring comparable pricing and promotions, as well as by amplifying brand recognition.

In-store holiday moments still close to consumers’ hearts

Year after year in this consumer survey, we ask questions about in-store shopping versus online. The results continue to tell the same story: In-store shopping is an integral part of the holiday experience for many. The tactile element of in-person shopping continues to be key, with the highest number of respondents (56%) ranking the ability to see and touch products as a factor that influences their decision to visit physical stores during the holiday season.

While many have theorized in-person shopping would continue to have a role helping consumers discover what items to gift, it continues to play a prominent role across the holiday purchasing journey. Nearly two-thirds (64%) of respondents plan to visit stores in person at the purchasing stage of their holiday shopping.

Consumers expect to use in-store shopping at the purchasing stage

^{Question: Which of these channels do you expect to use at the purchasing stage of your holiday shopping?}

What are consumers planning to purchase this holiday season? Gift cards continue to dominate as the top choice to give adult family members and friends, selected by 47% and 51% of respondents, respectively. As retailers prepare for the holidays, they’ll need to make sure gift cards are readily available, both in terms of placement and accessibility.

Beyond that, it’s critical to understand the business impacts of gift cards on inventory. Especially in a challenging economy, retailers should focus on anticipated inventory demand and timing based on usage of gift cards versus purchases of physical inventory. While it’s important to create tactile, in-person holiday experiences, retailers also need to create post-holiday occasions for consumers to use gift cards to purchase goods they want—instead of just buying holiday items on discount.

Spotlight on the AI opportunity for retailers

When it comes to addressing issues with holiday purchases or travel bookings, respondents of all ages show a strong preference for speaking directly with customer service agents instead of artificial intelligence (AI) assistants.

For example, to deal with a disruption related to a higher-value item, 73% of consumers rank speaking with a customer agent by phone in their top three preferences. Only 9% include using an AI assistant or chatbot on the retailer website in their top three.

Although many retailers are starting to use AI agents in customer service to reduce wait times or answer simple questions, they’re not yet ready to replace people with agentic AI. People want to interact with a person or have a person-like experience, so retailers need to continue to invest in people while they work towards significantly improving their usage of tools such as agentic AI.

Retailers should consider if they’re thinking about AI in the right way. Agentic commerce represents more than just a new channel—it’s set to redefine the structure of the retail journey. Retailers will need to evaluate how AI agents could transform their relationships with consumers and adjust go-to-market strategies accordingly.¹

Strategies for retailers this holiday season

Despite current economic challenges, there will be significant opportunities for retailers in the coming months. Critical areas of focus highlighted by our survey results include personalized marketing strategies, competitive pricing, in-store experiences and technology.

By focusing on consumer-centric strategies, retailers can create the vibrant and engaging shopping moments customers are looking for over the holiday season—and beyond.

^{1 Source: “The rise of agentic commerce could revolutionize buying behavior — sooner than you think,” PwC US, August 27, 2025, https://www.pwc.com/us/en/industries/consumer-markets/library/agentic-commerce.html.}