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Canadians To Spend More Overall This Holiday Season, But Adding Extra Debt Not On Their Shopping List: RBC

Stocks in this article: RY

TORONTO, Nov. 13, 2013 /CNW/ - As prime holiday shopping season approaches, Canadians remain generous in spirit, while continuing last year's trend of tightening their belts as gift-givers, according to the latest RBC Canadian Consumer Outlook. The overall holiday spending of Canadian gift givers is on the rise in 2013, with the cost expected to increase slightly from to $1,192.50 compared to $1,181.80 last year. The cost increase does not come from gift-giving, however, and instead from non-gift expenses.

Eight-in-10 Canadians (80 per cent) plan to give gifts this holiday season, but the average amount they intend to spend has decreased in 2013 from last year ( $608.60 versus $628.50), a downward trend since 2011. Conversely, the amount that Canadians intend to spend in other areas, like decorations, entertainment and travel, this holiday season rose in 2013 compared to last year ( $583 versus $553), edging up to levels not observed since 2011.

"Canadians continue to be conscious of their finances and intend to be smart with their expenses this holiday season," said Richa Hingorani, senior manager, Financial Planning Support, RBC. "One simple yet important step to keep in mind is that, with a little planning, it's easy to stay on top of holiday spending without dipping into your savings or increasing your debt. A holiday budget can go a long way to ensuring you're not over-extending yourself - and come January, you don't regret the holidays."

A recent RBC Economics report noted that Canadian households' non-mortgage debt grew at the slowest annual pace for 10 years in the 12 months ending September 2013.

In keeping with intentions to manage debt, a majority (54 per cent) of Canadians intend to cover their holiday expenses using cash or debit cards (56 per cent last year). One-in-four consumers (25 per cent) intend to pay with a credit card, but say they will pay it off in full within the next billing cycle, while only six per cent intend to carry a balance on their credit card.

Across the country, regional differences were apparent with British Columbia making the most significant cutbacks, while those in Atlantic Canada are outspending most other regions this season. Regional highlights include:

British Columbia:

  • 31 per cent of consumers intend to spend less this holiday season (versus 25 per cent nationally)
  • Largest decrease in overall holiday spending from 2012 ( $1,088 versus $1,326)
  • 77 per cent of consumers intend to give gifts this year, down from 86 per cent in 2012. Average spend on gifts: $557.

Alberta

  • Tied with the national average, 25 per cent of Albertans intend to reduce holiday spending
  • Despite decreasing spending from 2012 ( $1,325 versus $1,495), Albertans will spend the most this holiday season
  • 85 per cent of Albertans intend to give gifts in 2013, down from 87 per cent in 2012. Average spend on gifts: $673.

Saskatchewan/ Manitoba

  • Tied with the national average, 25 per cent of those in the region intend to reduce holiday spending
  • Total holiday spending to decrease from 2012 ( $1,245 versus $1,362) in the region
  • 86 per cent of those in the region intend to give gifts, up from 84 per cent in 2012. Average spend on gifts: $618.

Ontario

  • Tied with the national average, 25 per cent of those in the region intend to reduce holiday spending
  • Total holiday spending to increase from 2012 ( $1,245 versus $1,204) in the region
  • 80 per cent of Ontarians intend to give gifts this holiday season. Average spend on gifts: $673.

Quebec

  • Only 20 per cent of consumers in the region intend to reduce holiday spending, the lowest in the country.
  • Total holiday spending increased the most in the province from 2012 ( $1,060 versus $835)
  • 76 per cent of Quebecers intend to give gifts this holiday season, the lowest in the country. Average spend on gifts: $454.

Atlantic

  • 30 per cent of consumers in the region intend to reduce holiday spending in 2013
  • Total holiday spending in the region increased from 2012 ( $1,257 versus $1,211)
  • 89 per cent of those in the region intend to give gifts this season, the highest in the country. Average spend on gifts: $730.




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