TD Survey: 34% of Ontarians Cutting Holiday Spending Due to Inflation and Rising Costs

As the holidays approach, many residents in Ontario are planning to curb their spending, citing rising costs and inflation as the primary reasons for caution.

A new survey released Monday by TD Bank outlines this stark reality, with 34 per cent of Ontarians reporting they will be curtailing their holiday expenditures this year.

The Pressure to Spend vs. Financial Reality

Among those who plan to cut back, 65 per cent cite the higher cost of living as a key factor, while 51 per cent point to a lack of disposable income.

Anthony Celebre, a branch manager at TD in Barrie, Ontario, noted the competing pressures: “I think a lot of it is even pressures of trying to achieve more than the previous year and potentially making up for lost time throughout the pandemic.”

He added, “With returning to normal, now we have the expectation that OK, we have to make this holiday extra special and therefore go above and beyond the previous year.” However, many consumers are unsure what they can truly afford given the mounting everyday expenses.

Prioritizing Cuts: Social Spending Leads

The survey highlighted differing priorities for where the cuts will occur:

• Social Spending: 50 per cent of those spending less plan to cut back on social expenditures like dining out or attending holiday parties.

• Gifts: About 47 per cent are reducing gifts for family members, and 39 per cent are cutting back on gifts for friends.

Celebre explained that controllable costs, like gifts for loved ones, are “an easier pill to swallow” than variable costs. “But sometimes there’s some variables. So going to a social gathering, especially if it’s outside the home and maybe at an event space, there’s some variables on how much that would cost.”

The Budget vs. Impulse Buy Disconnect

Although Ontarians indicate a desire to reduce spending, a large majority—83 per cent—confessed that holiday “temptations,” such as flash sales or convenience purchases, could easily derail their budgets.

Retail analyst Bruce Winder is not surprised by this finding, noting the “disconnect between what customers say they’re gonna do and what they end up doing.” He cited a recent Salesforce report showing that online sales in Canada for the weekend following Black Friday were up 9% compared to a year ago.

Winder also told Global News that emotional impulses pose a significant threat to budgets: “The other is the emotional response, when they say ‘OK you know I know I’m supposed to spend only $30 on my brother, but I really love my brother and hey, what’s an extra $10,’ And then they do that across all family members. Next thing you know they’ve blown their budget to pieces.”

Smart Move: Increased Savings

On a positive note, among those cutting back on spending, 41 per cent are redirecting their money into savings instead of spending it.

Winder called this a smart strategy, especially given recent layoff announcements, such as those at Algoma Steel. He suggested that consumers are reacting to employment uncertainty: “So maybe Canadians or Ontarians are looking at this and saying, ‘You know what, there’s a lot of bad things happening in the province of Ontario from an employment perspective, I better put away some money cause I could lose my job in the new year and I still got to pay rent and I still gotta buy food.’”

Celebre advised consumers who wish to save for next year’s holiday shopping to start now, viewing it as a long-term goal achievable by setting aside money throughout the year.