Canadians to spend $211 less in average for Christmas holidays due to resurgence in Covid cases
With Covid-19 cases and the emergence of the Omicron variant, Canadians' Christmas spending have been lower than initially expected. The new surge in cases and the restrictions taken across the country mean less travel and more people staying home rather than going out for entertainment. In a survey released by Deloitte on October 2021, the average Canadian household's budget for Christmas was expected to reach $1,841 this year - meaning a 31% increase from 2020.
However, the recent resurgence of Covid-19 illustrated by the quick spread of the Omicron variant is likely to change things. The Hellosafe.ca team investigated to what extent the new surge in Covid-19 cases could challenge the initial budget that Canadians had planned to spend for Christmas.
Canadians’ Christmas budgets could have shrunk by 12% due to new surge in Covid cases
We have worked on a scenario where the number of daily infections in the country would exceed 10,000 by the end of December. With that number already exceeded, Canadians' actual budget for Christmas is likely to have gone down around $1,630, an 11.5% drop in comparison to the Christmas budget surveyed by Deloitte (representing an average decrease of $211 in Christams expenses).
In this scenario, Canadians' Christmas budget for 2021 would "only" increase by 16% in comparison with 2020.
Sources: Deloitte, PwC, Forecasts by Hellosafe.ca
Travel and entertainment expenses the most impacted by this new surge in cases
This decrease in Christmas spendings should mainly impact travel and entertainment expenses rather than the part of the budget allocated to buying gifts. Although it is very difficult in this moving context to estimate with accuracy how Canadians will react to the spread of Omicron, we can already tell that travel and entertainment will be the most negatively-affected type of expenses:
|Type of expense||Proportion in the decrease of the initially-planned budget for Christmas|
|Travel||65 to 75%|
|Entertainment||15 to 20%|
|Other||5 to 20%|
Source: Hellosafe.ca estimates
Within the "other" category, the budget allocated by Canadians to gifts could be reduced by between 0 and 3%. This means that this kind of expense would almost not be affected by a deterioration of the Covid situation.
Antoine Fruchard, CEO at Hellosafe.ca
"Even if it is almost certain that Canadians will spend more this year than in 2020, this year will not be the recovery that we could have expected. With new restrictions taken by public authorities across the country, we should see many travel and leisure expenses be lower than previously expected for the end of the year. With a new wave of uncertainty affecting Canadian citizens, people may be more cautious when spending their money. This is why we should not expect a record year in terms of Christmas expenses this year".
This study is based on information from public and private sources, which include: Deloitte, PwC and the Retail Council of Canada (Retail Insider). Hellosafe.ca's estimates for the year 2021 were carried out by our team of data analysts.
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