Making every dollar and holiday moment count

Gen Z to slash spending by 35% as consumers plan cutbacks, prioritize value and Canadian made products: PwC Canada's 2025 holiday outlook

• Holiday spending projected to decrease by 10% from last year, with Gen Z and Millennials leading cutbacks; 90% expect prices to be higher.
• Almost half of Canadians (49%) willing to pay more for Canadian-made products, and cross-border shopping declines. 78% plan to seek out alternatives to US-made products.
• In-store experiences and human interaction preferred over digital shopping. 45% plan to shop more for resale, upcycled, or used products, including thrift shopping.

TORONTO, Oct. 7, 2025 /CNW/ - Canadian consumers are approaching the 2025 holiday season with a cautious mindset, planning significant cutbacks in spending and prioritizing value, according to a recent PwC Canada survey. This year's PwC Canadian holiday outlook reveals a notable shift in consumer behaviour driven by rising costs and declining confidence, emphasizing making every dollar and holiday moment count.

"This holiday season, Canadians are not just shopping; they're strategizing. Faced with persistent economic pressures, consumers are making tough choices, prioritizing family spending, while tightening belts elsewhere," said Elisa Swern, National Retail and Consumer Leader at PwC Canada. "This isn't just about spending less; it's about a fundamental shift towards conscious consumption, where every dollar must deliver tangible value and purpose."

Canadian consumers plan to spend an average of $1,675 on gifts, travel, and entertainment this holiday season. While this is a 10% decrease from last year's spending, it represents a 2% increase from 2023 spending intentions.

As wallets tighten, Canadians will make hard choices about where to spend their money. Over eight in ten (81%) respondents are considering cutting back to save money over the next six months. While they don't plan to cut spending when it comes to family, they plan to cut back on gifts for friends, pets, and themselves compared to last year. This financial prudence is also reflected in a decreased preference for credit card use and an increased preference for debit cards, likely an additional effort to curb spending.

"For retailers, this isn't a time for business as usual. The data clearly shows consumers craving authenticity – from Canadian-made products to genuine human interaction," added Sébastien Doyon, Partner, Consulting and Consumer Markets at PwC Canada. "Retailers who lean into these trends, offering transparent value, personalized experiences, and a clear brand story, will not only capture sales but have an opportunity to build lasting loyalty in a challenging market."

The most significant spending reductions are anticipated among younger generations, with Gen Z consumers planning to spend 35% less this year, and millennials expecting an 11% reduction. This trend highlights the impact of economic uncertainty on these demographics, as more Gen Z enter the workforce and millennials face early mortgages and potential job losses. Holiday spending plans also vary across Canada. Consumers in British Columbia anticipate the highest average spend at $1,821, closely followed by Ontario at $1,788. In contrast, Quebec and Alberta project the lowest average spends this holiday season, both at $1,532.

The survey also reveals key trends that businesses should consider to maximize consumer spending this holiday season:

• Strong Loyalty to Canadian Products: Nearly half (49%) of Canadians would choose a more expensive Canadian-made product over an imported one of a similar quality, a "Canada-first" sentiment particularly strong among Baby Boomers (64%). Cross-border shopping is also down significantly, with only 12% (down from 20%) planning physical visits.
• In-Store Experiences Remain Crucial: Despite the rise of digital shopping, in-store shopping will be an integral part of the holiday experience this year, with 56% valuing the ability to see and touch products. Nearly two-thirds (64%) plan in-person store visits for purchasing.
• Digital Expectations from Younger Generations: Gen Z (44%) and Millennials (41%) show higher adoption of mobile payment solutions (compared to 29% overall), and 44% of Gen Z plan to use self-checkout (vs. 31% overall).
• Human Connection over AI in Customer Service: 73% of consumers prefer speaking directly with customer service agents for issues, with only 9% ranking AI assistants or chatbots in their top three preferences.

To read more about consumer spending trends and the 2025 Canadian holiday outlook, access the detailed report here.

About PwC Canada:
At PwC Canada, we help clients build trust and reinvent so they can turn complexity into competitive advantage. We're a tech-forward, people-empowered network with more than 7,000 partners and staff in offices across the country. Across audit and assurance, tax and legal, deals and consulting, we help build, accelerate and sustain momentum.

PwC refers to the Canadian member firm and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. Find out more by visiting us at: http://www.pwc.com/ca

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SOURCE PwC Management Services LP

For media inquiries, please contact: Anuja Kale-Agarwal, National Communications Director, PwC Canada, [email protected]