Canadians bracing for ‘gift-flation’ this holiday season

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As the holiday season kicks off, Canadians are preparing for “gift-flation” — but that’s not necessarily a bad thing.

A new survey found that the majority of respondents are actually increasing their budgets — but still hunting down bargains and shopping local when they can.

Technology company Square commissioned polling firm Leger to survey 1,516 Canadians, 83% of which reported that they expect gifts to cost more this year.

The findings show that shoppers plan to increase their budgets but be more conscious of their gift choices.

“Rising costs have Canadians in a reflective mood, with 83% agreeing that, due to ‘gift-flation,’ they’ll be more intentional and thoughtful about their purchases,” Roshan Jhunja, head of retail at Square, said.

That includes supporting local businesses, with 57% of respondents saying they would prefer to give and receive gifts from shops in their hometowns and a whopping 80% confirming they will shop local when possible.

That said, loyalty to local businesses hinges on competitive pricing and deals being offered by other retailers.

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While the majority of Canadians agreed they’ll shop and support local “where they can,” they also admitted that ultimately, they will “go where the deals are.”

Nearly two-thirds (61%) of the respondents said they plan to “deal-hunt more intensely,” particularly during Black Friday and Cyber Monday.

Square also polled hundreds of sellers in Canada, Australia, the U.S. and the U.K., with 71% of Canadian retailers planning to “work harder to attract customers and boost their holidays this year,” according to Jhunja.

Brandon Shedden, CEO of fashion label Cakeworthy, is hopeful his company’s efforts will pay off this holiday season.

The retailer has operated online since 2014, but recently celebrated the first anniversary of its brick-and-mortar location in Hamilton.

“We’re seeing that people are increasingly preferring to shop local, and while we’ve only been through one holiday season so far, we’re confident that this will be another good year for our physical shop,” Shedden said.

While 62% of those surveyed anticipated spending about the same as last year, nearly half (49%) of those who agree they expect gifts to cost more say they will boost their holiday budgets by at least 20% to 25% this year.

That has more than two-thirds of Canadians taking “big ticket purchases off the table,” though they still are expecting to “enjoy a few little luxuries this holiday season.”