TORONTO, ONTARIO--(Marketwire - Nov. 8, 2012) - According to the 2012 BMO Holiday Spending Outlook, Canadians expect to spend an average of $1,610 this holiday season - up from $1,397 in 2011.
Holiday shoppers expect to allocate most of their holiday spending to gift purchases - an average of $674. The primary reasons cited for spending more on gift purchases - up nearly $100 from last year - are having more people to shop for (41 per cent) followed by being better off financially (39 per cent).
Holiday Spending Allocation - Year over Year Comparison
Holiday Spending Across the Country
"For most Canadians, the holiday season can be an expensive time of year and one where prudent and responsible financial planning is essential," said Su McVey, Vice President, BMO Bank of Montreal. "Putting a holiday-specific budget in place ahead of time that sets clear spending limits can keep Canadians from over-extending themselves, and ensure other financial responsibilities and goals stay on track."
Gerrick Johnson, a toy analyst with BMO Capital Markets, said that in addition to the survey results showing a lift in spending intentions, new tactics implemented by toy retailers should also help to provide a boost in holiday sales.
"Consumers this year will benefit from a number of new tactics that retailers have implemented: hot toy reservation systems, more aggressive price match programs, same-day online delivery, and earlier and cheaper layaway," said Mr. Johnson. "These moves should help toy sales by making more expensive items more accessible, making all items easier to buy. They are also likely to entice earlier sales, which should help lift toy sales throughout the holiday season."
Majority of Canadians Setting Limits and Starting Early
The survey, conducted by Pollara, also looked at Canadians intentions for budgeting and when they plan to begin spending this holiday season, and found:
- Nearly half (47 per cent) of Canadians will set a loose or flexible budget and three-in-ten (29 per cent) will set a fixed budget for the holidays
- One-in-five (21 per cent) do not plan on creating a budget
- Almost all of those with a fixed budget (91 per cent) and three-quarters of those with a flexible budget (75 per cent) say they generally stick to it
- However, more than half (53 per cent) say they often make impulsive purchases during the holiday season - even those with a fixed or flexible budget in place
- The majority (68 per cent) plan to begin shopping before December, including three-in-ten (30 per cent) who plan to start shopping before November
- Further, women are twice as likely as men to start shopping before November (41 per cent versus 20 per cent), with men twice as likely to run the risk of becoming a last-minute shopper in December (38 per cent versus 21 per cent)
To make the most of your money this holiday season, BMO offers Canadians the following financial tips:
Start early with a plan: While most Canadians begin holiday shopping early, it's easy to end up leaving things to the last-minute if you don't have a plan in place. Last-minute shoppers run the risk of over-spending, going off-budget and possibly missing out on the gifts at the top of the list. Before heading out to the stores, create a budget to reflect your list, so that you can budget properly and avoid the last-minute shopping rush.
Make a budget; check it twice: Setting a budget as early as possible and revisiting it often can help prevent impulse spending. There are several online tools and resources available, such as BMO MoneyLogic, which allow you to set and track spending goals.
Research before you spend: Before you begin shopping, do your homework to determine which stores offer the best deals so you can get the best bang for your buck and avoid over-spending.
Maximize your spending: Utilize rewards programs to get the most out of your purchases this holiday season. Use a debit or credit card that offers rewards for purchases at multiple retail locations. The BMO AIR MILES bank account or BMO AIR MILES World credit card allows you to accelerate rewards earnings and significantly enhance the value of every dollar spent by allowing you to "double dip" - essentially earning rewards twice on the same purchase.
The survey results cited in the 2012 BMO Holiday Spending Outlook conducted by Pollara are compiled from a random sample of 1,000 Canadians 18 years of age and over between October 11 and October 16, 2012. A probability sample of this size would yield results accurate to ± 3.1 per cent, 19 times out of 20.
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified North American financial services organization. With total assets of $542 billion as at July 31, 2012, and more than 46,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.