As the temperature outside drops, so does the amount of money in many people’s bank accounts as they spend on gifts during the holiday season.
Except that this year, 78 per cent of Canadians plan to cut back on holiday spending, according to a news survey from BMO.
For Victoria gift store Oscar and Libby, the 24 days of the holiday season represents a quarter of their annual income, said store owner Teri Hustins.
“I think everybody needs to do what is responsible for them to do for the Christmas season,” said Hustins in response to the survey. “We’ve been around long enough as a business that we’ve kind of gone through ups and downs in the marketplace. We’re watching our expenses also as a business, knowing that we’re all pinched in our households right now.”
The BMO survey also reported that 45 per cent will spend less money on fewer gifts, 26 per cent of Canadians will cut down the number of people on their gift list this holiday season and over 37 per cent are not confident they will be able to afford every item on their holiday shopping list.
The survey comes as inflation remains high at 3.8 per cent.
“The holidays are certainly a time to celebrate with loved ones, but the holiday parties, family gatherings, travel, and gift exchanges can also pose a financial strain, especially during times of economic uncertainty,” said Gayle Ramsay from BMO.
The survey noted that 51 per cent of Canadians say thinking of holiday spending causes financial anxiety. This matches what Hustins has observed in her in her stores this year. She reports seeing more consumers purchasing items with a debit card and cash, rather than on a credit card.
“What that told me was that perhaps our customers were feeling uncomfortable putting anything else more on to their credit cards,” said the store owner. “So that was kind of my canary in the coalmine scenario.”
The gift store owners’ strategy to save this upcoming holiday season is to buy very little seasonal merchandise and more inventory that can remain on the shelves into the new year. Hustins noted that Oscar and Libby is known as a stocking stuffer store.
“We’re watching our expenses, we’re watching how much inventory we’re buying, because financing inventory with interest rates is expensive,” said Hustins. “For example, let’s say I order 144 widgets thinking that’ll last me the season. Then I might just order 72, and if I can squeeze one more to turn out of my inventory. We’re mindful of where our customers are customers might be at financially and trying to curate a store that gives people lots of flexibility in their gift giving.”