Travel and in-person events have been back for some time, and the process of returning to the office is well underway for many. While lockdowns and restrictions are no longer at play, some economic concerns that emerged through the pandemic still remain.
Canadians are more cost-conscious as they navigate elevated inflation and a higher cost of living. To help identify and describe trends that have emerged under these conditions, The Shifting Spend Priorities of Canadian Consumers has returned.
Through research conducted by Moneris and Angus Reid, findings presented within this report help capture the pulse of Canadian consumers and characterize their spending behaviours. The report focuses on the following three areas:
Consumer Sentiment – How do Canadians feel their spending has changed?
Consumer Spending – How does Canadians’ actual spending compare to sentiment?
The $1,000 Question – How does Canadians’ actual spending compare to sentiment?
Consumer Sentiment
To what extent do you agree…
| Perception statement | 2023 | 2022 |
| I feel stressed about my financial future | 62% | 59% |
| I am more likely to try to find deals/sales than I used to be | 79% | 74% |
| I am less likely to have cash on me than I was before the pandemic | 57% | 51% |
Growing concern
Last year brought a mix of pandemic recovery and economic issues, including supply chain disruption and rising inflation.
Concern was reflected in the response from Canadians in 2022. One year later, with increased cost of living and more cost-conscious consumers, more Canadians feel stressed about their financial future.
As a result, almost eight in 10 Canadians are looking for ways to make their dollars go further. And when it comes to using those dollars, fewer are carrying cash compared to pre-pandemic.
Would you say that you’re doing/purchasing LESS than before?
| Spend category | 2023 | 2022 |
| Items of clothing you buy | 46% | 49% |
| Items to furnish or update your home | 38% | 36% |
| Number of food items you buy at the grocery store | 27% | 22% |
| Number of food or drink items you buy when you go to a restaurant (including takeout) | 38% | 34% |
| Number of restaurant outings (including takeout, fast food, or bars) | 52% | 53% |
| Number of entertainment outings (e.g., movie theatres, amusement parks, golf courses etc.) | 60% | 67% |
| Number of trips to the gas station | 32% | 39% |
Cutting back versus cutting out
The majority of Canadians indicated they would be doing/purchasing less than before in their survey responses. Comparing responses to the same question last year, a few trends stand out.
More Canadians indicated they were purchasing fewer items at grocery stores (27 per cent versus 22 per cent), and restaurants (38 per cent versus 34 per cent), while the number of outings to restaurants remained unchanged.
Entertainment remains as the top selection; however, as in-person events began bouncing back, we see a drop year-over-year (60 per cent versus 67 per cent). In addition to more in-person events and reasons to leave the house, more companies are mandating in-office days which may also be contributing to fewer Canadians cutting back on gas (39 per cent to 32 per cent).
Would you say that you’re doing/purchasing MORE than before?
| Spend category | 2023 | 2022 |
| Items of clothing you buy | 11% | 9% |
| Items to furnish or update your home | 16% | 16% |
| Number of food items you buy at the grocery store | 18% | 19% |
| Number of food or drink items you buy when you go to a restaurant (including takeout) | 13% | 13% |
| Number of restaurant outings (including takeout, fast food, or bars) | 18% | 15% |
| Number of entertainment outings (e.g., movie theatres, amusement parks, golf courses etc.) | 10% | 7% |
| Number of trips to the gas station | 13% | 11% |
Cutting back versus cutting out, continued
Although the majority of Canadians indicate feeling concerned for their financial future, and are doing/purchasing less, there is a portion who are spending more.
Year-over-year, there is a three per cent increase in Canadians who said their number of restaurant and entertainment outings have increased. Despite economic conditions, there is a desire to enjoy leisure activities and events. Rather than cutting out these activities, Canadians’ survey responses show they are simply cutting back on how they enjoy them.
Consumer Spending
Spend volume: July 2023 versus July 2022
| Business category | Examples | VOL% Change |
| APPAREL | Clothing stores | -3% |
| ENTERTAINMENT | Amusement parks, movie theatres, golf courses, etc. | -4% |
| GAS & CONVENIENCE | Automated fuel dispensers & service stations | -10% |
| GROCERY | Supermarkets, bakeries, candy, and confection, etc. | 3% |
| HOUSEHOLD | Hardware, furniture, lumber, masonry, etc. | -2% |
| RESTAURANT | Bars, full service, & quick service | 3% |
| SPECIALTY | Antiques, bikes, jewelry, sporting goods, etc. | 2% |
| TOTAL | Including categories not listed | 1% |
Conservative spending and modest growth
The prevailing cost-conscious consumer sentiment can be seen in the year-over-year spend data, with a modest overall increase in spend volume of one per cent.
Starting with Entertainment, spend is down four per cent year-over-year, in line with the majority of survey responses indicating it was an area Canadians were purchasing/doing less of. Although sentiment is moving in the right direction for Entertainment, more time may be required before that growth is captured in the spend data.
Despite competing forces of moderating items purchased and frequency of visits, Grocery and Restaurant spend both saw a modest three per cent increase in spend volume.
While cost-conscious shopping is at play, other factors contribute as well. For example, the decrease in spend volume for Gas & Convenience is likely tied to gas prices falling from their peak in 2022 rather than a change in spend behaviour.
Average transaction size: July 2023 versus July 2022
| Business category | Examples | ATS % Change |
| APPAREL | Clothing stores | 4% |
| ENTERTAINMENT | Amusement parks, movie theatres, golf courses, etc. | -4% |
| GAS & CONVENIENCE | Automated fuel dispensers & service stations | -10% |
| GROCERY | Supermarkets, bakeries, candy, and confection, etc. | -2% |
| HOUSEHOLD | Hardware, furniture, lumber, masonry, etc. | -5% |
| RESTAURANT | Bars, full service, & quick service | 1% |
| SPECIALTY | Antiques, bikes, jewelry, sporting goods, etc. | -2% |
| TOTAL | Including categories not listed | -3% |
Rising inflation and falling average transaction sizes
Across all categories, average transaction size (ATS) decreased by three per cent. Despite higher inflation, Canadian sentiment shows a growing financial concern for the future, and consumers looking for sales may contribute to a decrease in ATS.
Other factors in addition to financial concern may also contribute. Again, the impact of falling gas prices can be seen in Gas & Convenience ATS decreasing.
In addition, through the pandemic Canadians invested in their homes, which translated into an increase in spending. Now, with lifted restrictions, in-person events, and return to office pulling Canadians out of their homes, the five per cent decrease in ATS for Household may be a correction.
Number of transactions: July 2023 versus July 2022
| Business category | Examples | Transaction % Change |
| APPAREL | Clothing stores | -7% |
| ENTERTAINMENT | Amusement parks, movie theatres, golf courses, etc. | 0% |
| GAS & CONVENIENCE | Automated fuel dispensers & service stations | 1% |
| GROCERY | Supermarkets, bakeries, candy, and confection, etc. | 5% |
| HOUSEHOLD | Hardware, furniture, lumber, masonry, etc. | 3% |
| RESTAURANT | Bars, full service, & quick service | 1% |
| SPECIALTY | Antiques, bikes, jewelry, sporting goods, etc. | 4% |
| TOTAL | Including categories not listed | 3% |
An extra trip to the store
Instead of stocking up and making the most of each trip as we saw during the pandemic, Canadians have increased the frequency of their visits to the grocery store. While Canadians might be modifying their behaviour by purchasing fewer items, they may be also compensating by making more trips to pick up missing items or take advantage of sales at multiple stores.
Also appearing as one of the top three areas Canadians said they spent less on, Apparel sees the largest decrease in transaction count year-over-year.
The $1,000 Question
If you had $1,000 less, what would you cut back on (top three)?
| Spend category | 2023 | 2022 |
| TRAVEL | 44% | 52% |
| GROCERIES | 12% | 46% |
| HOME FURNISHINGS & HOUSE RENOVATION | 37% | 48% |
| VEHICLE MAINTENANCE & UPDATES | 17% | 35% |
| CLOTHING & APPAREL | 36% | 37% |
| SPECIALTY ITEMS OR HOBBIES (JEWELRY OR SPORTING GOODS) | 56% | 31% |
| RESTAURANTS | 52% | 28% |
Sacrificing spend for core categories
Last year, Canadians were asked what they would cut back on if they had $1,000 less to spend. Asking the same question this year, we see how sentiment has changed, and what the new priorities of Canadians might be.
In 2022, travel most consistently ranked in the top three of categories to cut back on. Although it’s still a popular category to cut back on, far fewer Canadians have selected it in their top three. Meanwhile, other traditionally discretionary categories like Restaurants, Entertainment outings, and Specialty items saw significant increases as areas Canadians would look to sacrifice with reduced buying power.
Necessities like Groceries, Vehicle maintenance, and Home furnishing all saw decreases. Understandably, fewer Canadians would look to cut back on categories that are essential to day-to-day living. Specifically, regarding grocery spend, Canadians may already feel as though they have cut back enough, and there is limited room for further reductions in spend.
If you had an extra $1,000, where would you spend it (top three)?
| Spend category | 2023 | 2022 |
| TRAVEL | 44% | 52% |
| GROCERIES | 12% | 46% |
| HOME FURNISHINGS & HOUSE RENOVATION | 37% | 48% |
| VEHICLE MAINTENANCE & UPDATES | 17% | 35% |
| CLOTHING & APPAREL | 36% | 37% |
| SPECIALTY ITEMS OR HOBBIES (JEWELRY OR SPORTING GOODS) | 56% | 31% |
| RESTAURANTS | 52% | 28% |
From flying away to filling the fridge
While we saw some significant changes in the categories Canadians would cut back on, areas where Canadians would splurge remain relatively unchanged.
Slightly more Canadians selected travel in their top three. Grocery also saw an increase as Canadians look to offset the measures taken to combat inflation and higher cost of living. While home furnishing remains in the top three, it saw the largest decrease year-over-year, down four per cent.
Again, when Canadians were asked how they would modify spending, the vast majority opted to modify quantity over quality. For the scenario where respondents had $1,000 less, 79 per cent said they would buy fewer items. For the scenarios with $1,000 more, 62 per cent said they would buy more items.
CONTRIBUTED BY
Moneris is Canada’s largest provider of innovative, unified solutions for mobile, online, and in-store payments, processing more than one in three transactions. Serving businesses of every size and industry, Moneris offers hardware, software, and solutions to help transform the way businesses grow and operate, in payments and beyond. For more information, please visit www.moneris.com and follow @moneris.