Table of Contents
Overview
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- What you need to know
- Definition
Executive Summary
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- Canada today
- The people
- The economy
- The consumer
- The majority of Canadians perceive their financial health to be stable
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- Figure 1: Perception of financial health, February 2016
- Debt reduction and saving for retirement are the biggest financial challenges
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- Figure 2: Financial challenges, February 2016
- Canadians feeling the pinch of increased living costs
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- Figure 3: Factors impacting financial situation, February 2016
- There is a sense of concern among consumers
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- Figure 4: Attitudes towards current economic state, February 2016
- Consumers are more focused on the future than the now
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- Figure 5: Attitudes towards spending, February 2016
- What it means
Canada Today – The People
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- What you need to know
- The population is primarily concentrated in four urban centres
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- Figure 6: Share of population of Canada, by territory/province, 2014
- Canadian population is growing due mainly to immigration
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- Figure 7: Region of birth of immigrants, by period of immigration, Canada, 2011
- Figure 8: Foreign-born share of population by G8 country and Australia
- Canada is a low-fertility society
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- Figure 9: Annual births and birth rate*, 1981-2011
- The average age at childbirth is rising
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- Figure 10: Fertility rate, by age group (per 1,000 women), 2001-11
- Canada is experiencing a “baby boomlet”
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- Figure 11: Projected trends in the age structure of the Canadian population, 2014-19
- Canada’s population is aging
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- Figure 12: Population aged 65 years and over in Canada, historical and projected (% of total), 1971-2061
- Shifts in the family structure
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- Figure 13: Distribution and percentage change of census families, by family structure, 2001-11
- As seen in Mintel reports
- What this means for retailers
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- Figure 14: Parenting situation among Canadian mothers, August 2014
Canada Today – The Economy
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- What you need to know
- Overall negative impact of lower oil prices on the Canadian economy
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- Figure 15: Quarterly growth rates of real GDP, change over previous quarter, Q1 2010-Q4 2015
- Canada’s employment rate has been steady, but age is impacting labour force participation
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- Figure 16: Canada’s unemployment rate, by gender, February 2010-February 2016
- The weak Canadian dollar is impacting import costs
- Impact of inflation
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- Figure 17: Consumer price index, February 2010-February 2016
- The rising price of groceries
- Bank of Canada keeps interest rate at 0.5%
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- Figure 18: Canada bank rate 2005-16, March 2016
- The Canadian Dollar remains weak
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- Figure 19: Historical Canadian/US currency rate comparisons, December 2011-December 2015
- Wealth distribution and household debt levels in Canada
- Alberta faces the brunt of the resource sector decline
- Household debt levels are adding pressure to Canadian consumers
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- Figure 20: Total household debt percent of net disposable income for G7 countries, 2004-14
Expenditure Overview
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- What you need to know
- Total Canadian consumer expenditures 2015
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- Figure 21: Total Canada consumer expenditure and fan chart forecast, at current prices, 2014
- Outlook for the next five years
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- Figure 22: Total Canadian consumer expenditure and fan chart forecast, at current prices, 2010-20
Category Review – In-home Food
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- What you need to know
- What it means
- Food inflation supports increase in sales
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- Figure 23: Total Canadian consumer expenditure on food (at home), at current prices, 2010-15
- Upward sales momentum forecasted to continue
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- Figure 24: Best- and worst-case forecast value sales of the food (at home) market, at current prices, 2010-20
- What’s working
- Grocers successfully build defences against new entrants
- What’s not working
- Inflation taking a bite out of consumers’ wallets
- Trust deficit needs to be addressed with consumers
- What’s next
- Evolving consumer base influences consumer demand
- Changing consumer spending habits
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- Figure 25: Perceived change in spend on food (at home) compared to prior years, February 2015 and 2016
- Key consumer findings in the food market
Category Review – Dining Out
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- What you need to know
- What it means
- Foodservice has enjoyed steady growth
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- Figure 26: Total Canadian consumer expenditure on food – Dining out, at current prices, 2010-15
- The growth trend continues
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- Figure 27: Best- and worst-case forecast value sales of the food – Dining out market, at current prices, 2010-20
- What’s working
- What’s facing challenges
- What’s next
- Changing consumer spending habits
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- Figure 28: Perceived change in spend on food – Dining out compared to prior years, February 2015 and 2016
- Key consumer findings
Category Review – Alcoholic Beverages (at Home)
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- What you need to know
- What it means
- Beer remains the top choice for Canadians, but wine is growing share
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- Figure 29: Total Canadian consumer expenditure on alcoholic beverages (at home), at current prices, 2010-15
- Wine share forecasted to continue gains in a slower-growing market
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- Figure 30: Best- and worst-case forecast value sales of the alcoholic beverages (at home) market, at current prices, 2010-20
- What’s working
- Wine growth supported by aging Boomer cohort
- Value sales outpacing volume reflects continued trend to premiumization in industry
- Demand for craft beer higher among women
- What’s not working
- Beer volume losing share to wine
- What’s next
- Merger makes beer mega-brewer
- Regulation to open up beer sales at grocery designed to support Ontario’s craft beer industry
- Changing consumer spending habits
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- Figure 31: Perceived change in spend on alcoholic beverages (at home) compared to prior years, February 2015 and 2016
- Key consumer findings
Category Review – Alcoholic Beverages (Out of Home)
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- What you need to know
- What it means
- Increase in sales of alcoholic beverages at foodservice continues to trail at-home options and overall foodservice growth
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- Figure 32: Total Canadian consumer expenditure on alcoholic beverages (out of home), at current prices, 2010-15
- Added value needed to win share in a soft growth environment
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- Figure 33: Best- and worst-case forecast value sales of the alcoholic beverages (out of home) market, at current prices, 2010-20
- What’s working
- Pairing places more importance on alcoholic beverages
- Leveraging the art of the pour
- Girls’ night out
- What’s not working
- Economic and societal challenges for on-premise alcoholic beverage consumption
- What’s next
- Flavoured craft beers provide an opportunity for differentiation
- Starbucks – “Where everybody knows your name”
- Changing consumer spending habits
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- Figure 34: Perceived change in spend on alcoholic beverages (out of home) compared to prior years, February 2015 and 2016
- Key consumer findings
Category Review – Non-alcoholic Beverages (at Home)
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- What you need to know
- What it means
- Beverage market becoming more diversified
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- Figure 35: Total Canadian consumer expenditure on non-alcoholic beverages (at home), at current prices, 2010-15
- Diversification in beverage market to continue
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- Figure 36: Best- and worst-case forecast value sales of the non-alcoholic beverages (at home) market, at current prices, 2010-20
- What’s working
- Smaller is better for CSDs
- Manufacturers invest in flavour mixes
- What’s not working
- Sugar a barrier to CSD and juice consumption
- K-Cups experience first decline – a sign of a maturing category
- What’s next
- Demand for premium/natural CSDs and energy drinks
- Fewer ingredients with more benefits in juice
- Perception of spending remains consistent with last year
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- Figure 37: Perceived change in spend on non-alcoholic beverages (at home) compared to prior years, February 2015 and 2016
- Key consumer findings
Category Review – Beauty and Personal Care
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- What you need to know
- What it means
- Canada’s beauty and personal care market saw modest growth with the exception of 2013
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- Figure 38: Total Canadian consumer expenditure on beauty and personal care, at current prices, 2010-15
- The forecast for the sector is of continued slow growth
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- Figure 39: Best- and worst-case forecast value sales of the beauty and personal care market, at current prices, 2010-20
- What’s working
- The appeal of low prices
- Marketing to men
- The Sephora effect
- What’s not working
- Competitive environment for beauty retailers and brands and the need to stand out
- What’s next
- Multi-functionality and personalization
- Boosting online sales
- Changing consumer spending habits
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- Figure 40: Perceived change in spend on beauty and personal care compared to prior years, February 2015 and 2016
- Key consumer findings
Category Review – OTC Healthcare Remedies
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- What you need to know
- What it means
- The sector has been growing at a moderate pace since 2010
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- Figure 41: Total Canadian consumer expenditure on OTC healthcare remedies, at current prices, 2010-15
- Growth rate forecasted to slow
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- Figure 42: Best- and worst-case forecast value sales of the OTC healthcare remedies market, at current prices, 2010-20
- What’s working
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- Figure 43: Tropic Fruit Multivitamin Adult Chews Centrum
- What’s next
- Changing consumer spending habits
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- Figure 44: Perceived change in spend on OTC healthcare remedies compared to prior years, February 2015 and 2016
- Key consumer findings
Category Review – Household Care
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- What you need to know
- What it means
- Sector growth continues to soften
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- Figure 45: Total Canadian consumer expenditure on household care, at current prices, 2010-15
- Mintel predicts that the sector will plateau
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- Figure 46: Best- and worst-case forecast value sales of the household care market, at current prices, 2010-20
- What’s working
- What’s not working
- What’s next
- Changing consumer spending habits
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- Figure 47: Perceived change in spend on household care compared to prior years, February 2015 and 2016
- Key consumer findings
Category Review – Clothing, Footwear and Accessories
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- What you need to know
- What it means
- Upward momentum on clothing, footwear and accessories has led to an estimated $48.3 billion market
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- Figure 48: Total Canadian consumer expenditure on clothing, footwear and accessories, at current prices, 2010-15
- Growth of the sector will slow
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- Figure 49: Best- and worst-case forecast value sales of the clothing, footwear and accessories market, at current prices, 2010-20
- What’s working
- What’s not working
- What’s next
- Changing consumer spending habits
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- Figure 50: Perceived change in spend on clothing, footwear and accessories compared to prior years, February 2015 and 2016
- Key consumer findings
Category Review – Technology and Communications
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- What you need to know
- What it means
- Growth to continue but not at the pace seen in 2014
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- Figure 51: Total Canadian consumer expenditure on technology and communications, at current prices, 2010-15
- Slow growth predicted to continue
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- Figure 52: Best- and worst-case forecast value sales of the technology and communications market, at current prices, 2010-20
- What’s working
- Mobile phone ownership is dominated by smartphones
- Overall, Canadian consumers are satisfied with their cell phones
- What’s not working
- Online security is a concern, especially for those using mobile payments
- New mobile phones and data are expensive
- Smartwatch popularity is lagging
- What’s next
- Most Canadians are interested in a ‘connected’ smart home
- Changing consumer spending habits
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- Figure 53: Perceived change in spend on technology and communications compared to prior years, February 2015 and 2016
- Key consumer findings
Category Review – Vacations and Tourism
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- What you need to know
- What it means
- Growth in travel continues, but has slowed slightly
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- Figure 54: Total Canadian consumer expenditure on vacations and tourism, at current prices, 2010-15
- Regardless of financial constraints and weaker Canadian Dollar, Millennials will fuel growth in travel
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- Figure 55: Best- and worst-case forecast value sales of the vacations and tourism market, at current prices, 2010-20
- What’s working
- Cruises implement “pricing integrity” policies
- Reviews by social media influencers can be a powerful tool
- Kimpton hones in on the power of karma
- What’s not working
- Zika concerns may keep Canadians from travelling overseas
- Weakness in energy sector creates less demand on flights
- What’s next
- Appealing to all ages and affluence levels
- Changing consumer spending habits
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- Figure 56: Perceived change in spend on vacations and tourism compared to prior years, February 2015 and 2016
- Key consumer findings
Category Review – Leisure and Entertainment
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- What you need to know
- What it means
- Change of focus on discretionary funds remains a barrier to participation
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- Figure 57: Total Canadian consumer expenditure on leisure and entertainment, at current prices, 2010-15
- Negligible growth expected for entertainment and leisure market
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- Figure 58: Best- and worst-case forecast value sales of the leisure and entertainment market, at current prices, 2010-20
- What’s working
- Cinema in style
- What’s not working
- Difficulties in attracting younger consumers
- What’s next
- Bringing the fun to the consumer
- Seamless payment
- Changing consumer spending habits
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- Figure 59: Perceived change in spend on leisure and entertainment compared to prior years, February 2015 and 2016
- Key consumer findings
Category Review – Home and Garden
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- What you need to know
- What it means
- The sector has been increasing steadily over the past five years
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- Figure 60: Total Canadian consumer expenditure on home and garden, at current prices, 2010-15
- Slowing growth forecasted for the future
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- Figure 61: Best- and worst-case forecast value sales of the home and garden market, at current prices, 2010-20
- What’s working
- What’s not working
- What’s next
- Changing consumer spending habits
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- Figure 62: Perceived change in spend on home and garden compared to prior years, February 2015 and 2016
- Key consumer findings
Category Review – Transportation
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- What you need to know
- What it means
- Expenditures on this sector have seen healthy growth
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- Figure 63: Total Canadian consumer expenditure on transportation, at current prices, 2010-15
- Growth continues for the transportation sector
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- Figure 64: Best- and worst-case forecast value sales of the transportation market, at current prices, 2010-20
- What’s working
- Strong sales of new vehicles
- What’s not working
- Millennial disinterest in vehicle ownership
- What’s next
- Uber arising as a major competitor to the established taxi industry in Canada
- Changing consumer spending habits
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- Figure 65: Perceived change in spend on transportation compared to prior years, February 2015 and 2016
- Key consumer findings
Category Review – Personal Finance
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- What you need to know
- What it means
- Personal finance expenditure forecast to grow steadily
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- Figure 66: Total Canadian consumer expenditure on financial services, at current prices, 2010-15
- Positive momentum predicted to reach $94.9 billion in 2020
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- Figure 67: Best- and worst-case forecast value sales of personal financial services, at current prices, 2010-20
- What’s working
- What’s next
- Key consumer findings
- Around a third of Canadians have less than $5,000 in debt
- Over-65s have the highest ownership of investment products
- Most Canadians own and use a credit card
- Majority of Canadians expect to be debt-free and not overly dependent on government old age security at retirement
Category Review – Housing
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- What you need to know
- What it means
- Housing costs have been on the rise
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- Figure 68: Total Canadian consumer expenditures on housing, at current prices, 2010-15
- Continued growth is predicted
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- Figure 69: Best- and worst-case forecast value sales of housing, at current prices, 2010-20
- What’s next
- Key consumer findings
- Two out of three Canadians find the housing market overvalued
- Around half of Canadians agree that immigration fuels housing demand
- British Columbians most likely to believe that foreign buyers are driving the real estate market in major cities
The Consumer – How Canadians Perceive their Financial Health
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- What you need to know
- Majority of Canadians perceive their financial health as stable
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- Figure 70: Perception of financial health, February 2016
- The gender divide
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- Figure 71: Perception of financial health, by gender, February 2016
- Perception of financial health improves with life stage
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- Figure 72: Perception of financial health, by age, February 2016
- Opportunity: Getting them while they are still fresh
The Consumer – Financial Challenges and Priorities
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- What you need to know
- Paying off debt and saving for retirement are the biggest challenges
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- Figure 73: Financial challenges, February 2016
- Paying off debt is part and parcel with retirement planning
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- Figure 74: Attitudes towards saving for retirement, February 2016
- Millennial women and parents with young children are most likely to prioritize debt reduction and short-term goals
- Saving for retirement more likely to be a concern for 45-54s
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- Figure 75: Attitudes towards saving for retirement (any agree), by age, February 2016
The Consumer – Factors Impacting Current Financial Situation
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- What you need to know
- Canadians are feeling the pinch of rising costs
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- Figure 76: Factors impacting financial situation, February 2016
- In their words
- Middle-aged Canadians most likely to feel the pressure
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- Figure 77: ‘Increased cost of living’ as biggest factor impacting financial situation, by age, February 2016
- Opportunities for retailers
- Personalizing offers and making them sharable
- Leveraging technology
The Consumer – Perceived Changes to Spending vs Prior Years
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- What you need to know
- Four in 10 Canadians feel they are spending more on groceries
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- Figure 78: Perceived changes in spending in 2015 compared to prior years, February 2016
- Rising food costs felt most by parents with children at home – particularly mothers
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- Figure 79: Perceived ‘spending more’ in 2015 on in-home food compared to prior years, by presence of children, February 2016
- The impact of grocery costs on consumer behaviour – In their words
- Grocery retailers are recognizing opportunities and taking action
The Consumer – Where Extra Money is Spent
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- What you need to know
- Canadians balance debt reduction and treats once all the basics have been taken care of
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- Figure 80: How extra money is spent, February 2016
- Discretionary spending varies with age
- Parents are most inclined to put extra money towards their debt
- Millennials are prioritizing smaller treats
- Older men more likely to treat themselves to long vacations
- Canadians less likely to spend on treats in 2016 compared to 2015
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- Figure 81: Difference in categories where extra money is spent in 2016 vs 2015, February 2016
The Consumer – Outlook on the Current Economy
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- What you need to know
- Consumers are wary
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- Figure 82: Attitudes towards current economic state, February 2016
- Impact of the rise in cost of living – In their words
- Low Dollar value is seen as a contributor to rising costs
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- Figure 83: Attitudes towards current economic state, February 2016
- Lower Dollar value a boon for Canada’s tourism industry
- Women are more affected by the current economy
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- Figure 84: Attitudes towards current economic state (any agree), by gender, February 2016
- How retail brands can help
- Potential also exists for financial brands
The Consumer – Approach to Spending
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- What you need to know
- Canadians are preparing for the future
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- Figure 85: Attitudes towards spending, February 2016
- Consumers approach spend with careful consideration and are willing to invest in products that will last
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- Figure 86: Attitudes towards spending, February 2016
- Approach to spending – In their words
- Taking time to find deals
- Spending in moderation
- Paying more for quality products that last longer
- Canadians are leaning towards trading down when buying groceries
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- Figure 87: Attitudes towards spending, February 2016
- The gender gap
- Women under 55 and mothers are the most likely to spend the time to find deals
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- Figure 88: Attitudes towards spending (net top 2 agreement), by gender, age and parental status, February 2016
- Fewer Millennial women have the luxury to spend in moderation
- Opportunities for brands and retailers
Appendix – Data Sources and Abbreviations
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- Data sources
- Fan chart forecast
- Consumer survey data
- Consumer qualitative research
- Abbreviations and terms
- Abbreviations
Appendix – Market
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- Figure 89: Total Canada sales and forecast of overall expenditures, at inflation-adjusted prices, 2010-20
- Figure 90: Total Canada sales and forecast of food (at home), at inflation-adjusted prices, 2010-20
- Figure 91: Total Canada sales and forecast of food – Dining out market, at inflation-adjusted prices, 2010-20
- Figure 92: Total Canada sales and forecast of alcoholic beverages (at home) market, at inflation-adjusted prices, 2010-20
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- Figure 93: Total Canada sales and forecast of alcoholic beverages (out of home) market, at inflation-adjusted prices, 2010-20
- Figure 94: Total Canada sales and forecast of non-alcoholic beverages (at home) market, at inflation-adjusted prices, 2010-20
- Figure 95: Total Canada sales and forecast of beauty and personal care market, at inflation-adjusted prices, 2010-20
- Figure 96: Total Canada sales and forecast of OTC healthcare remedies market, at inflation-adjusted prices, 2010-20
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- Figure 97: Total Canada sales and forecast of household care market, at inflation-adjusted prices, 2010-20
- Figure 98: Total Canada sales and forecast of clothing, footwear and accessories market, at inflation-adjusted prices, 2010-20
- Figure 99: Total Canada sales and forecast of technology and communications market, at inflation-adjusted prices, 2010-20
- Figure 100: Total Canada sales and forecast of vacations and tourism market, at inflation-adjusted prices, 2010-20
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- Figure 101: Total Canada sales and forecast of leisure and entertainment market, at inflation-adjusted prices, 2010-20
- Figure 102: Total Canada sales and forecast of home and garden market, at inflation-adjusted prices, 2010-20
- Figure 103: Total Canada sales and forecast of transportation market, at inflation-adjusted prices, 2010-20
- Figure 104: Total Canada sales and forecast of financial services market, at inflation-adjusted prices, 2010-20
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- Figure 105: Total Canada sales and forecast of housing market, at inflation-adjusted prices, 2010-20
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