Canadian consumers are concerned about debt and are thinking about cutting back on non-essential expenses.
According to a survey conducted by market research firm Mintel, Canadian consumers are likely to be more conservative in their spending this year and will cut back in other areas in order to pay off their debts. In particular, Canadians expect to spend less money on out-of-home, pleasure-related goods and services.
"While the drop in oil prices was expected to give consumers extra cash for spending, the record-high level of household debt is top of mind among Canadian consumers leading them to adopt a slightly more conservative approach to spending, focusing on paying off debts and making cutbacks," says Carol Wong-Li, Senior Lifestyle and Leisure Analyst at Mintel.
The study revealed that planned cutbacks are centered on non-essential and pleasure-related social items, including out-of-home alcohol (35%), leisure/entertainment (32%) and dining out (33%). Instead, consumers plan to spend more time at home, and in particular 31% say they will allocate more money to in-home food. The report suggests that consumers age 45 and over are more likely to report declined spending across most categories, particularly dining out (38% spending less vs 10% spending more), leisure and entertainment (34% spending less vs 6% spending more), and clothing/accessories/footwear categories (29% vs 8% spending more).
"It is likely that Canadians are trying to be realistic with their approach to personal goals this year. While there is a high level of interest in achieving financial and personal goals, Canadians are much less inclined to cite that they 'will definitely do it' compared to those who 'would like to, but may not manage it'," comments Wong-Li. "The goals that see the highest commitments are spending more time with family, getting household finances in order and having a better work/life balance."