Canadian and American consumers appear to be weathering high inflation and spending lavishly on gifts so far in the 2022 holiday shopping season.
Black Friday, on Nov. 25, marked a strong start to the holiday shopping season in Canada as sales surged, RBC said yesterday in its RBC Consumer Spending Tracker report.
"Spending on electronics is running below prior holiday shopping periods, but spending on apparel, gifts, books, music, and entertainment is strong," the bank said.
"So far, holiday jewellery spending is six per cent below 2021 levels, but previous trends suggest a boost in purchases from last minute shoppers may yet arrive."
RBC tracks spending in part through credit-card transactions.
It said consumers have started to cut back on spending to stay at hotels but that spending at restaurants remains strong.
"Spending is expected to soften in 2023 as interest-rate hikes and inflation cut further into household purchasing power," the report said.
South of the border, the National Retail Federation (NRF) came to similar conclusions in its report from yesterday.
November retail sales dipped from a surge of early holiday shopping in October, but still saw solid year-over-year growth that marked a strong start to the holiday season, the NRF said.
“Consumers continued to spend on household priorities and holiday gifts for loved ones this November despite continued inflation and rising interest rates,” NRF president and CEO Matthew Shay said.
“Holiday shoppers are demonstrating resilience, and retailers are providing great products and experiences at the right price levels to help stretch household budgets."
He added that consumers have been shifting back to shopping in physical stores, and that he expects a record number of shoppers to shop for holiday gifts tomorrow and on Sunday – a weekend sometimes called "Super Saturday" weekend because it is the last full weekend before Christmas Day.
The U.S. Census Bureau yesterday said overall retail sales in November were down 0.6 per cent from October, but were up 6.5 per cent year over year.
The U.S. Labour Department earlier this week said annual inflation in the country was 7.1 per cent in November. The most recent Statistics Canada data for inflation north of the border was for October, when year-over-year inflation was 6.9 per cent.