Inflation making holiday shoppers more intentional about gift-giving this year: experts

With inflation cutting into many personal budgets this holiday season, local businesses and a retail expert say shoppers are being more intentional about their gift choices and how much they are spending.

On Christmas Eve, many Edmontonians dashed between stores to gather their last few holiday gifts. Over the cold snap, business slowed down at The Prints and the Paper, said Sandy Muldrew, the owner.

"It seems to go with the weather," Muldrew said.

December is the busiest time of year for the store, Muldrew said, with a third of total sales registered.

"You want everything to go right. You don't want any snow storms or really cold snaps or things like that, or a pandemic, of course," Muldrew added with a smile.

While overall sales trend to the same level as last year, fewer big-ticket items are selling.

"A lot of the little stuff still sells," he said. "I think because there's so much talk of a recession, even though there isn't a recession yet, people are weary."

Over at Plum Home and Design in Oliver, sales associate Holly Tetz says the store has been full of shoppers throughout the holiday season.

For Tetz, who worked in retail for the past 20 years, patrons are shopping with more intention this year.

"Previous years to this, I would say people would just sort of come in, and they shop, pick up a huge variety of items and say, 'I'll figure it out when I get home," Tetz said.

A customer purchases a last-minute Christmas gift on Saturday, Dec. 24, 2022 (CTV News Edmonton/Jessica Robb).
"Whereas now, I feel like they're coming and going, 'I have a list, and this is what I want.'"

This holiday season, the market has become more of a buyer's one, says Heather Thomson, Alberta School of Business Centre for Cities and Communities executive director.

CONSUMERS MAY HAVE UPPER HAND THIS YEAR

"The supply chain issues have worked themselves out, so there's actually quite a bit of stock," Thomson said.

"Last year, that was definitely not the case. It was definitely more of a seller's market," she said, adding that supply issues limited retailers' ability to have big sales or markdowns.

With the holidays representing a critical final push for business sales, Thomson said that a surplus of supply could mean more deals this year.

"Consumers could definitely have the upper hand over the next few weeks if they are prepared to do some digging and look for some really good deals," she added.

"Stores have to move through product just to make room for the new product that is coming in."

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A big question mark for many families is how big a dent inflation will make in their budget and the economic horizon for early 2023.

Thomson says that the average Canadian spends approximately $1,700 per person from Nov. 12 to Jan. 10 on holiday gifts. That is projected to fall by about seven per cent this year.

"I think inflation is hitting a lot of families for all different line items on our budgets, and that is causing consumers to be very choosy this year," the retail expert added. "They are looking for deals and if there aren't deals to be had for particular items, they are not just buying what's there."

"[In addition], I think that given the current uncertainty for next year's economy is going to be another reason why consumers will be a little more choosy this year."

With files from CTV News Edmonton's Jessica Robb