The face of the Canadian consumer is ever evolving while the economy continues on a steady, but uncertain trajectory in 2015. According to Mintel flagship report Canadian Lifestyles 2015, a comprehensive look at Canadian consumer markets, spending is expected to continue to rise, surpassing the $1 trillion mark reached for the first time in 2013 and is estimated to reach $1.084 trillion with expenditure increasing by 4.7 percent over the next five years. Food-related categories like dining out and groceries are key areas of interest for consumer spending. In fact, one third of consumers perceive increased spend on groceries in 2014 compared to previous years. Out-of-home pleasure-related expenditures and out-of-home alcoholic drinks are predicted to see slowed growth. The recently released report offers an overview of the categories where consumers are forecasted to spend in 2015 and beyond. From a demographic standpoint, the Canadian population is aging, with seniors as the fastest-growing age group in the country, and immigration rates continue to climb with one in five people in Canada being foreign-born. While the economy continues to grow, uncertain times lie ahead as the recent drop in oil prices weighs heavily, causing near-term growth to slow. Moreover, record-high levels of household debt against recently lowered interest rates have led to a drop in consumer confidence. Despite the country’s employment rate remaining steady over the past five years, with the percentage of unemployed Canadians falling to a post-recession low in January 2015, Mintel reports that consumers are likely to be more conservative in their spending this year, making cutbacks in order to prioritize paying off debt. However, sensible splurges are still a priority for Canadian consumers. “While the drop in oil prices was expected to give consumers extra cash for spending, the record-high level of household debt is top of mind among Canadian consumers leading them to adopt a slightly more conservative approach to spending, focusing on paying off debts and making cutbacks,” said Carol Wong-Li, Senior Lifestyle and Leisure Analyst at Mintel. “There is a glimmer of hope, however, with consumers still looking to treat themselves to long- and short-term rewards, creating a mood of sensible spending for 2015. We’re predicting food-related categories like dining out and groceries will experience reasonable growth this year.” Canadian consumer spending is estimated to reach $1.084 trillion with expenditure increasing by 4.7% over the next five years Long-term goals rewarded by short-term treats Although consumers express keen focus on cutting back their spending, Mintel data shows the reality is that they will continue to make purchases across all categories including non-essentials. In fact, the areas where Canadians are choosing to allocate discretionary dollars points to a desire for striking a balance between financial priorities and reasonable indulgences, specifically, dining out (31 percent) and long vacations (31 percent). In their quest to find an equilibrium, Canadians are also focusing on family relationships, personal well-being and taking steps towards adopting a healthier lifestyle in 2015. Furthermore, Canadian priorities in the categories they choose to spend their ‘extra’ money highlights an interest in balancing long-term goals with short- and long-term rewards. These include paying off debt (34 percent), dining out (31 percent) and small “extras” for family members (24 percent) among the top five categories. Where their discretionary funds are spent largely depends on the consumer’s life-stage. Canadian Millennials (those age 35 and under) place a high priority on short-term rewards and are just as likely to put extra dollars towards paying off debt (32 percent) as they are dining out (34 percent). Middle-aged consumers, particularly 35-44s, plan for the future and are more likely to cite paying off debt as a priority than other age groups (45 percent vs 34 percent overall). Older consumers (over-55s) are likely to be retired or planning for retirement, and therefore more inclined to put extra money towards a long vacations than average (39 percent vs 31 percent overall). However, two of Canada’s growing consumer segments deviate from the top three priorities. Chinese Canadians are more likely to prioritize investments (37 percent vs 23 percent overall) and cite better work/life balance as a personal goal (51 percent), while those who identify as LGBT are more likely to prioritize entertainment (31 percent vs 22 percent overall) and put a low priority on items that require additional saving time including investments (14 percent vs 23 percent overall). A quest to find balance This year is about finding life balance for Canadian consumers. Over three quarters of consumers plan to be more attentive to family relationships, financial/work priorities and personal well-being in 2015. “It is likely that Canadians are trying to be realistic with their approach to personal goals this year. While there is a high level of interest achieving financial and personal goals, Canadians are much less inclined to cite that they ‘will definitely do it’ compared to those who ‘would like to, but may not manage it’,” continued Wong-Li. “The goals that see the highest commitments are spending more time with family, getting household finances in order and having a better work/life balance. Women demonstrate a greater focus on family and physical appearance, while younger Canadians prioritizing self-enrichment more so than the average consumer.” In their quest to find balance, Canadians aim to adopt a healthy lifestyle. The top two goals are exercising regularly (64 percent) and eating more fruits and vegetables (59 percent). These priorities are aligned with current behaviors as most are already engaged in these activities and habits on a weekly basis. Furthermore, losing weight and getting more sleep are goals for nearly half of all Canadians (49 percent and 47 percent respectively). This may lead some to be more optimistic in their health and wellness goals, though most seem to be approaching the year with realistic expectations, citing a range of up to six health and wellness goals for the year (58 percent). Canadian women are taking a more active approach to health and wellness this year as men are targeting fewer goals than women with 31 percent of men cited targeting between one and three goals (vs 19 percent women), compared to 44 percent of women who are targeting seven or more goals (compared to 31 percent of men). In tandem, women are more likely to target virtually all health and wellness goals compared to men. However, focus differs by age with older women looking to become more active (56 percent), while younger women focus on cooking more at home (43 percent). Demographic differences are also seen by region and among segments, as Quebecers under-index on virtually all health/wellness goals, while Chinese Canadians prioritize sleep (59 percent vs 47 percent overall) and vitamins (40 percent vs 33 percent overall). Perceived cutbacks on non-essentials Canadians generally perceive similar levels of spending across categories in 2014 compared to previous years. Perceived cutbacks center on non-essential and pleasure-related social items, including out-of-home alcohol (35 percent), leisure/entertainment (32 percent) and dining out (33 percent). This points to consumers bringing the focus back into the home with increased spending on in-home food (31 percent). The perceived reduction in spend is highly influenced by consumers age 45 and over who are more likely to report declined spend across most categories, particularly dining out (38 percent spending less vs 10 percent spending more), leisure and entertainment (34 percent spending less vs 6 percent spending more), and clothing/accessories/footwear categories (29 percent vs 8 percent spending more). Although Canadians cite spending less across most categories, consumers also acknowledge that they will still have expenditures towards nonessential items. To this end, differences are seen among demographics with regards to reporting greater spend in certain areas. For example, Millennials spent more across most categories, parents spent more on household care and Chinese Canadians spent more on eating out and technology. 2014 expenditure overview In 2014, Canadian consumer spending continued to rise, surpassing the C$1 trillion mark for the first time in 2013 and is estimated to have reached C$1.084 trillion in 2014 with expenditures increasing by 4.7 percent over 2013 totals. Essential goods and services such as housing, transportation and personal finance account for three of the four largest categories. Canadian Lifestyles 2015 offers an overview of consumer spending in 2014: Expenditures on housing represent the largest category and account for about 25 percent of all Canadian consumer expenditures in 2014. Demographic shifts, including increased immigration and an aging population, have positively impacted the market. Expenditures on transportation increased 6.8 percent between 2013 and 2014 and represented the second largest category in Canadian expenditures. Retail sales were driven by motor vehicles purchases and fluctuating gasoline prices. The third-largest category, personal finance expenditures, increased 4.8 percent 2013-14. Positive employment growth led to healthy ownership rates of savings, investments, insurance and lending products. Consumer spending in 2015 and beyond Reflecting a similar trend to spending in recent years, total Canadian consumer expenditure is forecast to grow by 4.7 percent over the next five years and will likely exceed C$1.2 trillion in 2019. Over the next five years, food-related categories like dining out and groceries are expected to rise at a similar rate to overall growth. Canadian Lifestyles 2015 offers an overview of a few of the categories where consumer are forecast to spend in 2015 and beyond: Essential categories such as transportation and housing will see the greatest gains, food-related categories like dining out are also predicted to rise at a similar rate to overall growth. Canadians are highly engaged with the category with 88 percent ordering takeout/delivery and 87 percent dining in at restaurants monthly. Out-of-home pleasure-related expenditures, leisure and entertainment and out-of-home alcoholic drinks saw the least gains year over year. At seven percent, a relatively minor share of Canadian adults state that they spent more on alcoholic beverages on-site in the past year compared with prior years, while a far greater share (35 percent) say that are spending less. Press review copies of Mintel Canadian Lifestyles – Canada 2015 report and interviews with Carol Wong-Li, Senior Lifestyle and Leisure Analyst, are available on request from the press office. For all you need to know about consumer spending in 2015 – including an indepth overview of market opportunities and challenges, as well as exclusive consumer data – please visit mintel.com/thefifty to download your free 80-page e-book now. You might also be interested in: No related posts.