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Canadians hold back spending on Black Friday, Cyber Monday deals as sales drop

Shoppers head to the Black Friday sales in London
Shoppers head to the Black Friday sales in London

Canadians spent less online during the Black Friday/Cyber Monday sales period than last year, adding to other retail data showing inflation-wary consumers are guarding their wallets more closely.

Online sales were down eight per cent year over year, bucking the global trend of an increase of two per cent to $280.8 billion, Salesforce Inc. said in its annual Cyber Week report.

Traffic from Canada also fell, down one per cent year over year, although the average value of a purchase rose by 0.3 per cent to $106, according to Salesforce.

Mobile devices were the most popular vehicle for shoppers, accounting for 70 per cent of Black Friday’s traffic, while 29 per cent used computers and three per cent used tablets.

The findings from Salesforce, which analyzes shopping data from more than 1.5 billion shoppers on its Customer 360 platform, seem to echo gross domestic product and retail sales data that indicate Canadians have been slowly pulling back on spending.

Third-quarter GDP figures showed consumer spending fell one per cent during the quarter. Benjamin Reitzes, managing director of macro strategy at BMO Capital Markets, said in a note that it was the first time consumer spending had fallen since 2009, barring the pandemic period.

Statistics Canada also reported that the household saving rate rose to 5.7 per cent from 5.1 per cent in the second quarter. In 2019, the savings rate in the third quarter was 2.5 per cent.

“That continues the trend of households socking away a bit extra since the pandemic, as the pre-pandemic norm was below three per cent,” Reitzes said. “It appears that consumers still have the wherewithal to keep spending if they choose, though perhaps they’re just preparing for higher interest costs.”

Interest rates have risen 350 basis points to 3.75 per cent from 0.25 per cent as the Bank of Canada fights to contain demand and bring inflation under control. The consumer price index was at 6.9 per cent in October, well above the central bank’s target rate of two per cent.

Recent retail sales data for Canada also indicates consumers are hesitating, with sales in September falling 0.5 per cent month over month. A flash reading for October estimated sales may have risen 1.5 per cent, although it was unclear what role the jump in gasoline prices last month played.

If Canadians were more cautious this Black Friday, Americans were anything but. Sales on Salesforce platforms in the United States during Black Friday and Cyber Monday rose 12 per cent and eight per cent, respectively.

Correction: As the result of an editing error, an earlier version of this story misstated the dollar amount of Canadian online sales. In fact, there were $280.8 billion in online sales globally for the Black Friday/Cyber Monday period. The Financial Post regrets the error.

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