Deloitte Canada's 2026 Holiday Retail Outlook projects a significant contraction in seasonal consumer activity. Total holiday expenditures are expected to drop 14% this year, falling to an average of $1,305 per person compared to the $1,521 recorded in 2025.
A $216 per-person spending slump
The projected decline in consumer activity is driven by a fundamental shift in how Canadians approach seasonal shopping. While gift and gift card spending specifically is expected to fall by 5%,the broader impact on total holiday-related expenditures—including entertaining and seasonal activities—is much more severe.
Economic uncertainty is the primary driver behind this shift in behavior. According to the Deloitte Canada report, shoppers are becoming increasingly price-conscious as they navigate a landscape of financial instability. Deloitte Canada's Shaunna Conway notes that while Canadians are not cancelling the holiday season entirely, they are becoming "far more discerning" in their purchasing decisions .
The 51% Black Friday budget drain
Retailers should prepare for a highly concentrated period of sales, as the traditional holiday shopping window is narrowing. The Deloitte Canada report finds that more than half of all holiday budgets, specifically 51%, are expected to be exhausted by the conclusion of the Black Friday and Cyber Monday period.
This concentration of spending is fueled by a massive wave of price comparison among the public. As reported by CTV News, 80% of surveyed Canadians are actively comparing different shopping options or intentionally waiting for the best possible deals before committing their funds. This behavior suggests that the "wait-and-see" approach will dominate the early holiday season, placing immense pressure on retailers to provide aggressive,early-season discounts to capture attention.
The 35% threshold for Canadian-made premiums
A complex tension is emerging between consumer values and their actual purchasing power. While 45% of Canadian consumers indicated that local or Canadian ownership is an important factor when deciding where to shop, this sentiment is being tested by the reality of inflation. The Deloitte Canada study highlights a pragmatic reality: 35% of shoppers stated they are unwilling to pay a premium for products based solely on their Canadian or local origins.
This suggests that for many Canadians, the "buy local" movement is being sidelined by the necessity of finding the best value. Retailers that can successfully marry a compelling value proposition with a sense of local identity may find themselves in a stronger position to capture the shrinking holiday market .
Will the 45% economic pessimism trigger a long-term retail recession?
Deep-seated anxieties about the future of the Canadian economy are evident in the latest consumer data. One in three Canadians, or 34%, report feeling financially worse off than they were last year, and a staggering 45% expect the economy to continue weakening through 2027.
This widespread pessimism leaves several critical questions unanswered for the retail sector. It remains unclear how much of this spending drop is a temporary reaction to current inflation versus a fundamental shift in long-term consumer confidence. Furthermore , while Deloitte Canada's Shaunna Conway suggests that retailers offering clear value will thrive, the report does not specify which specific sectors—such as luxury goods or electronics—will bear the brunt of the 14% spending decline.
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