Canadians have been more frugal this holiday season. Retailers are struggling to keep up: analyst

Entering some of the busiest shopping days of the year, many retailers are relying on sales from the holiday season while Canadian shoppers facing inflation, higher interest rates, and rising food prices are getting increasingly frugal.

“I think unfortunately we are going to see a number of retailers go bankrupt in January and February based on how hard it was in the fall," retail analyst Bruce Winder told CTV News Toronto Friday.

• Download our app to get local alerts to your device
• Get the latest local updates right to your inbox

According to Winder, many shoppers are not purchasing full-price items, putting pressure on stores to offer discounts.

"The majority of people are saying ‘I’ve got to find a way to do Christmas cheaper than I did last year,'" Winder said. "You'll see more shoppers waiting for sales. People are scrounging through the internet looking for nickels and dimes to save."

In addition to seeking out bargains, more shoppers are also gifting used, refurbished, and homemade items this year, Winder said, something he referred to as “Thriftmas.” They are also buying for fewer people and opting to celebrate at home rather than dining out, he said. 

This undated handout image features a white porcelain acorn ornament on top of a present. (Corinna vanGerwen / THE CANADIAN PRESS)

Peter Goldsztajn, vice president of corporate data and analytics with Moneris told CTV News Toronto it’s clear that not only are shoppers targeting sales this year — they also want them to last longer.

“Like a Boxing week or a Black Friday month, that's a trend we are seeing that's picking up," Goldsztajn said.

Despite sales being down so far this shopping season, Winder said he expects the weekend before Christmas will be a busy one. The last Saturday before Christmas, known as 'Super Saturday' to many retailers is one of the busiest shopping days of the year.

“Chances are you'll find it difficult to find a parking space if you go shopping in the greater Toronto area this weekend. I expect to see a lot of action at the malls this Saturday for sure and Sunday," he said.

Winder says the second half of 2024 could be better for Canadian retailers if interest rates drop, freeing up more cash for Canadian consumers.