Canadian Lifestyles Market Report 2023

Overview

• What you need to know
• This Report looks at the following areas

Executive Summary

• Canada today
• The people
• The economy
• The markets
• The consumer
• Multiculturalism is complex and multifaceted
• Canadians skew to traditional, local, loyal, frugal shopping – with exceptions
• Consumers are ready and able to find savings
• Ad representation is noticed by particular cultural groups

Canada Today – The People

• Generational makeup by the numbers
  • Figure 1: Canadian population, by age group, 2022
• A shift in Canada’s power structure
• Canada’s diversity has shifted in recent decades
  • Figure 2: Population of racialized groups in Canada (000s), 2001-2021
• Immigration will continue to support Canadian population growth
• Remote work has settled, but only 1 in 6 work at home all the time
  • Figure 3: Working location, by generation, 2023
• Mental health is becoming a front-and-centre topic in Canada
  • Figure 4: Mental health concerns, 2023

Canada Today – The Economy

• Inflation remains the top concern, with increased attention on interest rates
• Inflation is settling, but is still hitting Canadians in important categories
  • Figure 5: Consumer price index, January 2021-June 2023
• Inflation concerns have plateaued, but interest rates give Canadians another reason to lose sleep
  • Figure 6: Top concerns: inflation and interest rates, 2023
• Household saving rate is finally back to normal levels
  • Figure 7: Household saving rate, Q4 2019-Q1 2023
• Unemployment remains steady while job vacancies decline
  • Figure 8: Job vacancies, Q1 2021-Q1 2023
• GDP has stabilized post-pandemic
  • Figure 9: Gross domestic product, April 2019-April 2023

The Market – Overview

• Canadian consumer spending in 2022
• Spending by category
  • Figure 10: Total Canadian consumer expenditure (billions), at current prices, 2022

Category Review – Housing

• Analyst perspective
• Top takeaways
• Market overview
• Opportunities
• Consumers prefer to obtain a mortgage with their primary bank/credit union
• Mortgage brokers are viewed in a positive light, especially by younger people
• There’s still interest in income properties
• Homebuyers are motivated by pride of ownership
• Challenges
• Rising rates are a concern for many consumers
• Baby Boomers aren’t looking to sell

Category Review – Personal Finances

• Analyst perspective
• Top takeaways
• Market overview
• Opportunities
• Improving the financial health of Canadians
• Half of younger men trust investing advice on social media
• Challenges
• Half of consumers have cut spending due to high inflation
• Robo-advisors are not meeting expectations
• Physical branches remain important

Category Review – In-home Food

• Analyst perspective
• Top takeaways
• Market overview
• Opportunities
• Tiered solutions make more sense for packaged foods
• Convenience still resonates with Canadians, regardless of inflation
• Tech continues to become more engrained in the shopping experience
• Challenges
• As grocery prices rise, Canadians look for different ways to save
• Canada’s evolving population dynamics necessitate adaptation in the food industry

Category Review – Alcoholic Beverages (at Home and On-premise)

• Analyst perspective
• Top takeaways
• Market overview
• Opportunities
• Alcoholic beverages help facilitate reconnections with friends
• Trial formats offer flexibility and potential savings for consumers
• Challenges
• The alcoholic beverage landscape continues to be more competitive
• There is a more sober-curious mindset in Canada

Category Review – Non-alcoholic Beverages (at Home)

• Analyst perspective
• Top takeaways
• Market overview
• Opportunities
• Packaging remains the best way for beverages to bolster their environmental bona fides
• Generative AI can be used to connect beverage brands to consumers
• Challenges
• Water is winning, which can impact other beverage categories
• The solidification of remote work hurts foodservice and, therefore, coffee sales

Category Review – Dining Out

• Analyst perspective
• Top takeaways
• Market overview
  • Figure 11: Total Canadian consumer expenditure (millions): foodservice and food, at constant 2012 prices, Q1 2019-Q1 2023
• Opportunities
• Restaurants are an important part of consumers’ lives
• Flipping the script to make dining out the ‘affordable’ option
• Challenges
• Restaurants are feeling the ripple effects of inflation
• Restaurants are dependent on other industries
• The evolution of delivery makes life more difficult for restaurateurs

Category Review – Beauty and Personal Care

• Analyst perspective
• Top takeaways
• Market overview
• Opportunities
• Validate beauty’s place in self-care routines
• Brands can build trust with more transparent formulation claims
• Support consumer engagement with further education
• Challenges
• Engagement with beauty declines with age
• Consumers need safety assurances

Category Review – Technology and Communications

• Analyst perspective
• Top takeaways
• Market overview
• Opportunities
• Diversity in tech has never been more important
• There’s space and demand for more affordable entertainment technology
• Stand out as a non-negotiable source of entertainment during tight financial times
• Challenges
• Convincing consumers of the importance of connection speeds
• Multiple barriers exist to further metaverse adoption and usage

Canadian Lifestyles – Fast Facts

Canada’s Multiculturalism

• Racial diversity is increasing
  • Figure 12: Race, Gen Z vs Baby Boomers, 2023
• Consumers’ personal backgrounds are diverse
  • Figure 13: Country of origin, 2023
• • Figure 14: Number of years living in Canada, 2023
• Parents’ place of birth adds a layer to diversity and multiculturalism
  • Figure 15: Parents’ country of origin, 2023
• • Figure 16: Languages of proficiency, by personal background, 2023
• How multiculturalism varies within Canada
• Canada’s multiculturalism is regional
  • Figure 17: Personal background, by region, 2023
• Younger generations are more diverse
  • Figure 18: Personal background, by generation, 2023

Canadian Values

• Most believe freedom is an important aspect of this country
  • Figure 19: Most important Canadian values, 2023
• • Figure 20: Most important Canadian values: freedom, by age and gender, 2023
• • Figure 21: Most important Canadian values: freedom, by region and length of time in Canada, 2023
• How equality, diversity and inclusivity vary across the market
  • Figure 22: Most important Canadian values, overall vs South Asian and Chinese consumers, 2023
• • Figure 23: Reitmans | Diversity is the Fabric of Canada campaign, March 2021
• How Canadian values have changed since 2018
  • Figure 24: Most important Canadian values, 2018 vs 2023

Representation in Advertising

• • Figure 25: Representation in recently seen advertisements, 2023
• Newer Canadians feel represented in the ads they see
  • Figure 26: Representation in recently seen advertisements, by length of time in Canada, 2023
• French Canadians see themselves in advertisements
  • Figure 27: Representation in recently seen advertisements, by language spoken at home, 2023
• Lower income households and retirees feel underrepresented
  • Figure 28: Representation in recently seen advertisements, overall vs HHI <$25,000 and retirees, 2023

The Importance of Local

• Fresh food is the most locally-relevant category in the market
  • Figure 29: Important to buy locally, 2023
• Younger consumers aren’t shopping locally
  • Figure 30: Categories important to buy locally, by age, 2023
• South Asian and Chinese consumers are less interested in localism
  • Figure 31: Categories important to buy locally, by race, 2023
• Personal backgrounds don’t have a major impact on localism
  • Figure 32: Categories important to buy locally, by personal background, 2023

Types of Shoppers

• Canadians skew to traditional, local, loyal, frugal shopping habits
  • Figure 33: Shopper types, 2023
• Traditional shopping skews to older consumers, digital to younger and more diverse
  • Figure 34: Shopper type: traditional, by age, employment status, race and length of time in Canada, 2023
• • Figure 35: Shopper type: digital, by age, employment status, race and length of time in Canada, 2023
• Local and traditional shoppers have a lot in common
  • Figure 36: Shopper type: local, by age, employment status, race and length of time in Canada, 2023
• International shoppers are more common in certain parts of the country
  • Figure 37: Shopper type: international, by region, 2023
• • Figure 38: Shopper type: international, by living location, 2023
• Loyal and adventurous shoppers don’t need to be mutually exclusive
• Loyalty skews to older consumers, but does not skew across race or multicultural factors
  • Figure 39: Shopper type: loyal, by age, employment status, race and length of time in Canada, 2023
• • Figure 40: Shopper type: adventurous, by age, employment status, race and length of time in Canada, 2023
• • Figure 41: Doritos® Roulette™, May 2015
  • Figure 42: Boston Pizza Instagram post, July 2023
• Quebec consumers are particularly loyal
  • Figure 43: Shopper type: loyal, by region, 2023
• Consumers are more frugal than luxurious
  • Figure 44: Self-description of shopping behaviours, by age, 2023
• • Figure 45: Self-description of shopping behaviours, by race, 2023
• Frugality over luxury is common across financial situations
  • Figure 46: Self-description of shopping behaviours, by household income, 2023
• • Figure 47: Self-description of shopping behaviours, by financial situation, 2023

Budgeting Tactics in Retail

• Consumers have a toolbox of ways to save money while shopping
  • Figure 48: Shopping tactics (NET: always/often), 2023
• Canadians are savvy savings seekers
  • Figure 49: Shopping tactics: deals/discounts/promotions (NET: always/often), men vs women, 2023
• Different discount strategies across multicultural groups
  • Figure 50: Shopping tactics: deals/discounts/promotions (NET: always/often), overall vs Chinese and South Asian consumers, 2023
• • Figure 51: Shopping tactics: deals/discounts/promotions (NET: always/often), overall vs newer Canadians, 2023
• Savings tactics are relevant for younger consumers
  • Figure 52: Shopping tactics: deals/discounts/promotions (NET: always/often), by age, 2023
• Everyday shopping habits can lead to savings
  • Figure 53: Shopping tactics: everyday behaviours (NET: always/often), overall vs Chinese and South Asian consumers, 2023
• Everyone looks to save regardless of personal finances – but they have different approaches
  • Figure 54: Shopping tactics: everyday behaviours (NET: always/often), by financial situation, 2023
• Premium purchases and splurging are relatively uncommon
  • Figure 55: Shopping tactics: pay more for a premium version of the item I want (NET: always/often), by age, gender, race and length of time in Canada, 2023
• • Figure 56: Shopping tactics: splurge on things I really want even if it’s outside my budget (NET: always/often), by age, gender, race and length of time in Canada, 2023
• Leisure Trends – Canada – 2023Targeting dads who spend
  • Figure 57: Shopping tactics: paying for premium and splurging (NET: always/often), by gender and parental status, 2023
• Quebec consumers are reluctant to spend
  • Figure 58: Shopping tactics: paying for premium and splurging, overall vs Quebec, 2023

Appendix – Data Sources and Abbreviations

• Data sources
• Consumer survey data
• Mintel Trend Drivers
• Abbreviations and terms
• Abbreviations
• Terms