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Cautious Canadian consumers shopping with their hearts
2026 Canadian holiday outlook
Key findings
Canadian consumers plan to spend 11% less this holiday season than last. A bright spot is households with children, which plan to spend nearly double those without.
More than half (54%) of consumers say they’ll pay more for a Canadian-made product, up from 49% last year. Plans to cross-border shop stay roughly half of historic levels.
AI usage in holiday shopping has jumped from 17% to 28% this year. But 59% of millennials and Gen Z say they won’t use AI in their holiday shopping.
Amid economic uncertainty, Canadian consumers are moving cautiously but shopping with their hearts where they can.
How are they planning to stretch their budgets? To what extent will patriotism and artificial intelligence (AI) shape their purchasing? And how should retailers respond? To better understand what matters most to shoppers, we surveyed more than 1,000 Canadian consumers this summer. Here’s what they told us.
Canadian consumers are cautious—but still shopping
This holiday season, Canadian consumers plan to spend an average of $1,487 on gifts, travel, and entertainment. This is an 11% decrease from last year.
Spending is contracting, and holiday shoppers this year are making choices and trade-offs accordingly. Travel is seeing the steepest category decline, down 14%. Among those who are travelling, many will be remaining close to home and staying with friends and family.
Who’s driving the overall projected spending decline? Older consumers are pulling back dramatically. Gen X and baby boomers are planning to spend 21% and 18% less this year than last year, respectively. Millennials are pulling back by 6%, while Gen Z are the only ones planning to spend more. While Gen Z’s projected spending is up 8% compared to last year, this is likely more of a stabilization than a true increase.
There are regional variations. While spending intentions across most regions are down, the one exception is Quebec, which is flat.
How holiday spending plans vary across Canada
Percentages show year-over-year changes.
Region |
Spending amount |
British Columbia |
$1,639 ▼10% |
| Prairies* | $1,261 ▼18% |
| Ontario | $1,567 ▼12% |
| Quebec | $1,497 (no significant change) |
| Atlantic Canada | $1,349 ▼15% |
| Canada | $1,487 ▼11% |
Question: How much do you plan to spend on gifts, travel, and entertainment for others and yourself?
*Alberta, Manitoba, and Saskatchewan
A bright spot? Individuals in households with children plan to spend nearly double that of those without children. These individuals are planning to spend more across all recipient categories, including on themselves. When it comes to gifts for children, this group is prioritizing connection and shared moments. They’re more likely to plan to buy screen-free, hands-on activities for kids (35% vs. 29% of households without children) and experiences (26% vs. 11% of households without children).
Less spending overall doesn’t mean less shopping activity. Consumers will be looking for discounted pricing and promotions, and we’re seeing the rise of an active but cautious shopper. This year, 75% of Canadian consumers say they’re taking steps to stretch their spending, and 69% plan to purchase less expensive alternatives.
They’re also planning to be strategic about when they do their shopping. This year, younger generations plan to concentrate their shopping around peak promotional windows: 38% of Gen Z and 33% of millennials plan to shop over the Black Friday weekend. More than four out of ten (43%) baby boomers, on the other hand, plan to delay their spending into December.
A significant majority of Canadian consumers say deals and discounts will influence their holiday shopping. Retailers that continue to align their promotional cadence to Black Friday and December will be better positioned to move inventory. The focus for retailers should stay on execution: making tactical promotional adjustments week to week to clear inventory.
With older generations pulling back and Gen Z emerging, this will be an important holiday season for retailers to earn the loyalty of millennial households, the segment driving the most spending activity.
Where are the generations looking to cut back?
Use the drop-down filter to compare the spending intentions of different age groups. Percentages show year-over-year changes.
Question: How much do you plan to spend on others and yourself in the following categories?
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Elbows still up as Canadian consumers show patriotism with wallets
Although consumers plan to spend less overall this holiday season, buying Canadian has become even more important to shoppers.
This year, more than half (54%) of Canadian consumers say they would choose a product made in Canada that costs more if two products have a similar look, feel, and quality. This is up from the 49% who were willing to pay more for Canadian products last year. Despite their drop in spending intentions this year, baby boomers are still leading the charge on buying Canadian. Two-thirds (66%) are willing to pay more for Canadian products.
Just like last year, we see further evidence of Canada-first sentiment in the low number of consumers planning to cross-border shop this holiday season. Once again, just over one out of ten Canadian consumers plan to do so. That’s down from 20% in 2024.
Our survey was conducted in July and early August before the recent round of tariff escalations, so these numbers may under-represent current Canadian sentiment. Nonetheless, the direction is clear. A significant majority of Canadian consumers (72%) continue to actively look for alternatives to US-made products as they do their holiday shopping.
With a potentially more captive Canadian audience, have retailers adapted enough to emphasize and appropriately price Canadian products? Understanding, communicating, and promoting what’s been made, assembled, or designed in Canada is now the bare minimum. Retailers need to ask themselves if they have the right balance of Canadian products they can sustainably maintain in stores at the right price point.
How could the trade dispute affect holiday prices?
New Canadian surtaxes on select US-origin goods could increase costs for some importers and retailers. Separate US measures may also create additional costs and market-access challenges for Canadian exporters.
Canada has introduced surtaxes on selected US-origin products that might be relevant to holiday spending. These product groups include certain appliances, electronics, food products, and manufactured goods. Because the surtaxes apply to specific tariff classifications and not to entire retail categories, the effects will vary by product category.
With Canadian consumers planning to spend cautiously, retailers must decide how to manage any additional costs through pricing, promotions, margins, and supplier discussions. Over the longer term, they’ll also need to review their sourcing and supply-chain arrangements to reduce exposure to future trade disruptions.
Help shoppers buy Canadian
Understand tariff exposure, communicate product origin, and build sourcing strategies that balance availability and affordability.
Not this year? AI usage is up, but more than half of younger consumers opt out
This year’s survey results uncovered an AI paradox. While overall AI usage is up, a significant portion of younger consumers say they don’t intend to use AI in their holiday shopping journey.
More than one out of four (28%) Canadian consumers now plan to use AI at some point in their holiday shopping journey. Overall usage has jumped by 11 percentage points from last year, when it sat at 17%. But the growth story isn’t straightforward: 59% of millennials and Gen Z say they don’t plan to use AI in their holiday shopping.
Among those who do use AI, adoption is still early. Of the Canadian AI users who provided a prompt example, only 11% show advanced prompt maturity. Consumers with more advanced prompts report significantly higher satisfaction (80% vs. 69% overall). As AI usage among consumers grows, sophistication and satisfaction will likely increase as well.
How are Canadian consumers planning to use AI-powered tools?
Arrows show year-over-year changes.
| Holiday shopping stage | Percentage of consumers planning to use AI |
Discovering what items to gift |
11% ▲2% |
| Researching more info about the item | 18% ▲7% |
| Comparing items | 17% ▲6% |
| Purchasing the item | 5% (N/A) |
While the use of AI tools continues to grow, we’re seeing a strong sense of nostalgia among consumers. For the holiday season, consumers continue to prefer in-store experiences. Visiting stores remains the top channel for discovery and purchasing across all generations, and 40% plan to use both online and in-store for purchasing. Almost three out of four (74%) Canadian consumers are prioritizing offline and in-person activities this holiday season.
While this holiday season’s data tells a story of cautious AI adoption, the year-over-year usage jump indicates both AI usage and sophistication will continue to grow quickly among all segments. Agentic shopping will increasingly remove friction for customers by finding products, organizing information from different retailers, and presenting the lowest cost options. Retailers need to be connected to these tools and provide rich content so their product assortment is considered and analyzed by emerging models.
Consumer preferences are already being reshaped by what large language models (LLMs) present to them. Agentic commerce will be critical for staying a top retailer for emerging demographics.
Will AI recommend your products?
Prepare your brand, content, and commerce strategy for AI-driven product discovery.
Winning retail strategies for this holiday season
Despite current economic pressures, there will be opportunities this holiday season for retailers to place products into the hands of savvy consumers. To capture wallet share among more budget-conscious baby boomers and Gen X, it will be critical to time in-store promotions to December and double down on Canadian-made products. To attract emerging younger households, retailers will need to focus on experiences, screen-free offerings, and AI-ready commerce.
The retail landscape is changing fast. Retailers that win this season, and beyond, will be those that earn loyalty now while building capabilities to serve the way Canadian consumers will shop in the future.
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Consumer Markets, CPG Leader, Partner, PwC Canada
Tel: +1 416 687 8650
National Leader, Customs & International Trade. Parner, Transfer Pricing and Customs, PwC Canada