Across the latest set of quarterly earnings calls, nearly every major company spanning Canada’s retail landscape said they’ve noticed shoppers increasingly looking for cost savings and thinking twice about some purchases.
“The interest rate is going to impact how much disposable income that a customer is spending on things like fashion, apparel, footwear and even experiences and activities,” said Liza Amlani, principal and founder at Retail Strategy Group, a consulting firm. The rebound Amlani sees taking shape was reflected in a recent survey of 300 Canadians that financial services firm Stifel completed. The survey showed slightly more respondents in April than in January felt their spending would increase over the next 12 months.
“Apparel is something people like to treat themselves to and it’s something that has been a little more recession resistant than maybe food,” he reasoned. While customers these days are willing to spend on lower cost but more indulgent menu items like pizza, coffee and dessert, they’re cutting back on higher ticket items like alcohol, he said.
In fact, Stifel said spending intentions for those earning less than $75,000 annually were weakening in the lead up to April.