TORONTO, Ont. – Deloitte Canada has released its 2026 Holiday Retail Outlook and they are reporting spending on gifts and gift cards is going to drop by a noticeable amount.
Their report released Oct. 14 indicates spending on those two items is projected to drop five per cent, which according to their news release is a signal that Canadians will be increasingly intentional about their purchases this year.
Deloitte is also projecting a drop in spending on holiday entertaining and experiences — down 22 per cent and 20 per cent, respectively.
The survey is projecting the lowest overall holiday spending since the survey began 10 years ago — at $1,305, down from $1,521 in 2025.
The findings also point to high concerns from consumers about the economy. Deloitte reports Canadians are feeling more cautious about spending, that this caution is shaping consumer concern and that Canadians are budgeting, and not abandoning, the holiday season.
They report 34 per cent of consumers feel that their household finances are worse than a year ago, compared to a response of 32 per cent last year. 40 per cent feel their finances are unchanged and 27 per cent report improvement.
The Deloitte survey describes household finances as “split rather than collapsing”, and characterize the sentiment as “anxious, not broken.”
There is also unease being expressed about the overall economy.
Deloitte reports 45 per cent say they expect the economy to weaken by 2027. Concerns about a possible recession have climbed to 74 per cent, up from 70 per cent in the survey a year ago.
Shaunna Conway, Partner and National Retail Leader at Deloitte Canada, said economic uncertainty is making an impact on spending decisions.
“So yeah, Canadians are cautious about spending this year for sure. 74 per cent were worried about a recession. Projected spending on gifts is down five per cent. Even higher when you look at things like entertaining, experiences, or other items like charity donations are all down this year.
”And what that really is telling us is that Canadians are saving more this year, or intending to save. And how they spend, how they intend to spend, and how that translates to actual spend, we won't know until January. But for now, Canadians are telling us that they intend to spend less this holiday season.”
As for concerns about the economy, Conway said that is not unexpected results in light of what has gone on, referring to the tariff situation.
However, she said 66 per cent felt “unchanged or better than last year when it comes to household finances. And so that's an indication that people are saving more and they're feeling okay at home. And… they're being cautious with all the different things in the economy that are happening, inflation, and they're making wise choices when it comes to their personal household.”
Key takeaways, according to Deloitte Canada, are as follows:
- First, Deloitte reports spending is down, despite the fact that most households are reporting finances are stable or improving. The survey is reporting 29 per cent of respondents intend to spend less this year. Deloitte is also reporting that consumers expect to visit on average 16 stores and digital destinations when looking for gifts, up from 14 a year ago. Those ages 35 – 44 say they will shop at an average of 23 retailers during the holiday season, Deloitte reports.
- Second, consumers are described as “price sensitive.” Value is described as a primary driver of spending decisions with Deloitte reporting 80 per cent are actively searching or waiting for the best price. They report 78 per cent of respondents actively looking for discounts, promotions, and sales. 77 per cent say they are prioritizing reasonable prices and value when choosing a retailer. As well, 83 per cent are expressing concerns about tariffs, and the impact on prices and the broader economy.
- Third, Conway says Canadians are using AI for inspiration, for search, for looking at how different products relate to each other,” but as far as making transactions or actually checking out in a generative AI model, “we are not there yet. And Canadians are telling us that they don't trust generative AI for checkout capability quite yet.” The survey reports 39 per cent of consumers plan to use AI for holiday shopping, mainly for gift inspiration, price comparison and deal discovery when doing holiday shopping. That compares to 25 per cent in 2025. But Deloitte reports only 19 per cent are comfortable about letting AI make the purchase.
Other highlights of the survey include the following:
Black Friday/Cyber Monday is described as being the main event and not a preview, with 51 per cent of budgets expected to be spent by the close of this period.
55 per cent of consumers agreed their planned holiday budgeting was for in-store versus 42 per cent online.
And stores remain central to holiday shopping, says Deloitte: 58 per cent say they prefer to shop in store.
In Canada, said Conway, “the store continues to be critical.”
“And the interesting thing about that is the digital capability is closing the gap. And so what that means is that we're seeing digital transactions go up year over year. And while the store is still critical, the digital properties for a brand are equally critical coming into the holiday season for transactions.”
