Deloitte Canada's Holiday Retail Outlook Shows Spending Expected to Rise by 3%

 Value proposition, integrated experiences and AI-driven insights will drive Canadian retail strategies

TORONTO, Oct. 14, 2025 /CNW/ - Today Deloitte Canada has released the 2025 Holiday Retail Outlook: Wrapped in resilience: a season of smart spending, revealing that holiday spending is expected to rise by 3% this year. While this increase signals resilience in consumers, nearly half of Canadians (46%) believe the economy will worsen in the coming year. As a result, Canadians are highly focused on value, with 78% planning to shop for the best deals.

"Consumers are signaling that they intend to spend this holiday season, but with mindfulness. This balanced approach is fostering a resilient and resourceful consumer base, creating an environment where retailers can adapt and innovate," says Shaunna Conway, Partner and National Retail Leader at Deloitte Canada. "This sentiment has a significant impact on consumer behaviour, and Canadian retailers who can deliver meaningful value will be well-positioned to thrive during this holiday season."

The Deloitte Holiday Retail Outlook reveals that this year's holiday shopping season is starting earlier than ever, as one in five Canadians plan to begin their shopping in October (up from 15% last year) to maximize value. Further, almost a quarter of holiday budgets are expected to be spent on Black Friday alone. With value top of mind for consumers this holiday season, timing on promotional strategies is critical for retailers.

The report also reveals that AI adoption continues to reshape the retail landscape. Canadian shoppers are increasingly turning to artificial intelligence (AI) for gift inspiration, personalized recommendations, and convenient customer service. In fact, one in four Canadians believe retailers should leverage AI both in store and online to enhance customer service and deliver personalized product information. Further, 42% of Canadians plan to begin their holiday shopping online this season. The continued rise of online shopping and AI is bringing data privacy and security concerns to the forefront, with 70% of consumers worrying about sharing personal information with retailers due to data breaches, misuse of data, and uncertainty about how their information will be used.

"This season is shaped by thoughtful spending and the fast pace of digital change," says Marty Weintraub, Partner, Technology and Transformation, Deloitte Canada. "Retailers shouldn't just be keeping up with technology, they need to be reimagining the shopping experience through technology, while investing in long-term priorities that support this transformation, like cybersecurity. All of this is critical for building consumer trust, loyalty and affinity for retailers that will last well beyond the holiday season."   

There is also clear intention to support Canadian retailers this year, with 73% of Canadians expressing a preference for supporting local or Canadian-owned businesses and 56% preferring to buy gifts that support local or small businesses. However, value, brand, and convenience still remain top priorities, with many shoppers willing to look beyond local options to find deals. There is an opportunity for retailers to promote "local and Canadian" while balancing celebrating local offerings with delivering value and avoiding overstated "maple washing" claims.

Additional Key Findings from the Deloitte Canada Holiday Retail Outlook:

The Mindful Consumer

• While spending on gifts and experiences has increased by 2% (+$18), consumers are cutting back in other discretionary categories (-8%, -$21), likely due to ongoing economic uncertainties.
• Household finances in Canada are showing modest improvement, up 3% from the previous year. Despite this progress, economic concerns remain high: nearly half (46%) expect the economy to worsen next year, up from 36% last year. Concerns about a potential recession have also increased (70% vs. 63% last year), and 80% are worried about the impact of tariffs on the Canadian economy.
• Inflation remains a concern, with 70% of consumers expecting higher prices this year (up from 65% last year), making it a leading factor influencing spending behavior.

 Evolving Trends in Canadian Holiday Retail

• 48% of consumers find holiday shopping stressful, and 6 in 10 believe holiday shopping is easier online. During the busy holiday season, consumers may prefer online shopping for its ease and time-saving benefits.
• 55% of the holiday budgets will be spent in-store (vs. 42% online)—consistent year-over-year. Just over half (55%) of the budget will be spent in-store—higher for Baby Boomers (60%) than Millennials (53%).
• Gen-Z and Millennials will spend nearly half of their holiday budget online. Gen Z (45%) and Millennials (49%) spend more of their budget online than Baby Boomers (31%).
• 1 in 2 shoppers visit stores for gift inspiration and the festive experience; 1 in 2 (52%) believe shopping in-store is fun and festive; 4 in 10 (42%) value the personal connections with store associates.
• 63% indicate that loyalty programs influence where they choose to shop, while 48% are influenced by personalized offers.
• Value-driven online marketplaces are gaining traction, with one in three consumers having used them in the past three months, and 17% planning to use them for holiday gifts this year (vs. 14% last year).

AI Adoption Raises the Stakes for Cybersecurity

• Interest and engagement with AI is increasing: 63% of Canadians are familiar with AI, 27% are excited about its potential, and 50% have used AI in the past three months (up from 33% last year).
• Gen Z Canadians are almost three times more likely than Baby Boomers to have used AI recently (64% vs. 24%). 1 in 3 (33%) Gen Z Canadians use AI for product research compared to only 9% of Baby Boomers.
• 70% of consumers worry about sharing personal information with retailers, either because of data breaches and misuse (72%) or because they don't know how their information will be used (70%).
• 64% are hesitant to shop at retailers that have experienced a breach. Notably, only 1 in 3 believe sharing data is a necessary part of the shopping experience.

Learn more about the 2025 Holiday Retail Outlook.

The Deloitte Canada survey was conducted between August 27 and September 5, 2025, polling over 1,000 Canadian consumers across age groups, financial situations, and regions. All figures are in Canadian dollars.

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SOURCE Deloitte Canada