Canadians are heading into the 2025 holiday season planning to spend an average of $1,675 on gifts, travel and entertainment, according to PwC Canada’s annual Holiday Outlook.
That figure represents a 10% drop from last year, as rising prices and economic uncertainty push consumers to stretch their dollars further.
Despite the overall pullback, PwC says Canadians are showing clear priorities — spending less on themselves and friends, but keeping family budgets largely intact.
“This holiday season, Canadians aren’t just shopping — they’re strategizing,” said Elisa Swern, national retail and consumer leader at PwC Canada, in a statement. “Faced with persistent economic pressures, they’re making tough choices and demanding that every dollar deliver tangible value and purpose.”
Younger Canadians tighten belts as costs bite
Younger shoppers are driving the biggest pullback in holiday spending this year. Gen Z consumers plan to spend 34 to 35% less than they did in 2024, compared to an 11% decline among millenials, according to PwC.
The report links the slowdown to continued affordability pressures, with more Gen Z Canadians entering the workforce and taking on rent, and millennials balancing early mortgages and childcare costs.
"This isn’t just about spending less”, Swern said in the release, “it’s about a fundamental shift towards conscious consumption, where every dollar must deliver tangible value and purpose."
Overall, 81% of Canadians say they’re considering cutting back to save money over the next six months. While most won’t reduce spending on family, many plan to spend less on friends, pets and themselves.
PwC’s data also shows a shift in how consumers are managing payments: A move away from credit cards toward debit, reflecting a desire to keep tighter control over discretionary purchases.
Some of that restraint may also reflect broader economic sentiment. Consumer confidence has softened in recent months, and the Bank of Canada’s rate-cut pause means borrowing costs remain high heading into the holiday season — leaving many households cautious about overextending.
‘Canada-first’ sentiment grows as shoppers seek authenticity
Despite smaller budgets, many Canadians are making deliberate choices about where their money goes. Nearly half (49%) say they’d pay more for Canadian-made products over imported goods of similar quality, up sharply from earlier this year when just 38% expressed that preference in grocery shopping.
The trend is strongest among baby boomers (64%), but even younger consumers are showing a value-driven streak — prioritizing authenticity, sustainability and transparent brand stories. Cross-border shopping is also down: Just 12% plan to visit the U.S. for holiday purchases, compared with 20% last year.
“For retailers, this isn’t a time for business as usual,” said Sébastien Doyon, partner, Consulting and Consumer Markets at PwC Canada, in the release. “Consumers are craving authenticity — from Canadian-made products to genuine human interaction. Retailers who deliver transparent value and personal connection have a real opportunity to build loyalty in a challenging market.”
In-store experiences still key for all generations
While digital tools remain a staple, Canadians are reaffirming their preference for in-person experiences. Nearly two-thirds (64%) plan to shop in stores this holiday season, and 56% say being able to see and touch products influences their purchase decisions. Gift cards remain the most popular present, selected by 47% of Canadians for family and 51% for friends.
Younger shoppers are still leading the digital charge. About 44% of Gen Z and 41% of millennials plan to use mobile payments, and a similar share of Gen Z consumers expect to use self-checkout. But even among these groups, PwC found a clear preference for human customer service over AI assistants, with only 9% ranking chatbots among their top support choices.
The result, PwC says, is a retail environment split between tactile nostalgia and digital convenience — one where consumers “want to see the value, feel the product, and connect with real people,” even as they tap to pay.
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