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2014 BMO Holiday Outlook: Spending Expected to Drop to Three Year Low

- Travel continues to take priority, while decreased spending on entertaining and gifts lead decline

- While 28 per cent took on debt as a result of spending in 2013, only 11 per cent expect to do the same this year

- Slower job growth, elevated debts and volatile stock market contributing to cautious consumer mindset, while lower gasoline prices offer a positive offset

TORONTO, ONTARIO--(Marketwired - Nov. 3, 2014) - Consumers appear to be taking a more frugal approach to this holiday season, with the average Canadian planning to spend $1,517 - down from $1,810 in 2013 and marking the lowest holiday spend in three years.

The report shows plans for holiday travel remain virtually unchanged, with the average Canadian setting aside nearly $700 for trips over the holidays. However, the amount of money spent on gifts is expected to drop by 19 per cent compared to a year ago, while spending on entertaining is expected to fall by 25 per cent. Canadians cited trying to cut costs as the number one reason for pulling back on spending.

Holiday Spending Allocation - Year-over-Year Comparison

Purchases 2014 2013 2012 2011
Gifts $ 551 $ 678 $ 674 $ 583
Trips $ 677 $ 689 $ 563 $ 360
Entertaining $ 211 $ 282 $ 267 $ 307
Other (decorations) $ 79 $ 161 $ 106 $ 147

2014 Holiday Spending Across the Country

Gifts $ 625 $ 460 $ 575 $ 597 $ 652 $ 503
Trips $ 542 $ 603 $ 669 $ 805 $ 971 $ 604
Entertaining $ 206 $ 189 $ 223 $ 179 $ 237 $ 213
Other (decorations) $ 104 $ 70 $ 81 $ 69 $ 87 $ 72


  • The majority of holiday shopping will take place in November (39 per cent), with one-third (34 per cent) starting earlier and another 26 per cent waiting until December
  • There has been no change in the planned shopping patterns of Canadians this year, with malls continuing to be the most often shopped location (72 per cent) followed by big box stores (54 per cent) or online (51 per cent)

"With slower job growth this year, and many new jobs being part-time positions, Canadians are facing weaker income growth heading into the holiday season," said Sal Guatieri, Senior Economist, BMO Capital Markets. "Recent stock market volatility and elevated household debt could also dampen sales."

Mr. Guatieri noted that one positive offset is lower gasoline prices, which should support spending power in this busy holiday period.

The report also revealed that only 11 per cent expect to go into debt as a result of holiday spending. However, while 14 per cent anticipated taking on holiday debt last year, 28 per cent actually did, with an average of $963.

"It's encouraging to see that Canadians are planning to avoid taking on holiday spending debt, however to do so means having a detailed spending plan in place well in advance," said Christine Canning, Head of Everyday Banking, BMO Bank of Montreal. "With travel arrangements likely pre-booked and the expense tied up in advance, Canadians are most vulnerable to falling off track with gift purchases, especially panic purchases made closer to the holiday."

Ms. Canning added that planning gift purchases and utilizing tools such as personal financial management tools designed to track everyday spending and savings can help keep Canadians on budget and avoid unpleasant post-holiday surprises.

Canadians Favour Rewards

  • One third (32 per cent) of Canadians have purchased a gift for someone to gain bonus reward miles, even if it was not the perfect gift
  • A quarter (26 per cent) of Canadians are planning to use reward points to travel this holiday season
  • Four-in-ten Canadians have purchased additional gifts with money saved from using rewards points

"Getting the most out of purchases and travel is critical during a tight-budget holiday season, but not all reward programs offer attractive returns on spending," said Victoria Pearce, Managing Director, North American Retail Payments, BMO Bank of Montreal. "As Canadians prioritize travel for the holiday season, choosing a reward program with maximum travel flexibility and benefits equips the user with strong purchasing power."

For example, BMO World Elite MasterCard customers can redeem points to cover all flight charges and taxes, and choose to fly on any airline with no blackout periods. The no-fee BMO AIR MILES MasterCard earns you 1 AIR MILES reward mile for every $20 you spend, every time, everywhere. Visit for more information.

The survey results cited in the 2014 BMO Holiday Spending Outlook conducted by Pollara are compiled from a random sample of 1,005 Canadians 18 years of age and over between October 14 and October 16, 2014. 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 financial services organization based in North America. The bank offers a broad range of retail banking, wealth management and investment banking products and services to more than 12 million customers. BMO Financial Group had more than $586 billion in total assets and approximately 47,000 employees at July 31, 2014.

Media Contacts:
Matthew Duffin, Toronto
(416) 867-3996

Valerie Doucet, Montreal
(514) 877-8224

Twitter: @BMOmedia