TORONTO--(Marketwire - May 24, 2011) - Canadian consumers are burdened by debt two years after the Great Recession and are planning to cut spending. Their high debt is a result of relatively strong consumer spending through the downturn, a factor that helped drive Canada's recovery. Now, they're planning to cut spending -- by adopting the savvy shopping behaviours they learned during the recession. In fact, Canadian consumers are among the most likely in the world to say they're inclined to "buy on deal."

Those are the key findings of a new report from The Boston Consulting Group (BCG). The report, "Navigating New Consumer Realities: The Canadian Consumer Economy in 2011," is based on an annual global survey of consumers. The survey was conducted last month and involved 20,000 consumers in 20 countries.

"While Canadians feel optimistic about the state of the economy relative to their global peers, they also feel personally burdened and anxious about the record level of debt that was accumulated through the downturn," said Cliff Grevler, a Partner in the Toronto office of BCG. "Canadians have demonstrated increasingly frugal shopping behaviour in an attempt to cut back, and now rank second among 20 countries globally in their desire to buy products on deal."

Canadians are the second most optimistic when it comes to the economy -- and are much more optimistic than Americans:

  • 80% of Canadians think they're better off than Americans; 66% think they're better off than Europeans
  • Canadians ranked second in overall optimism about the economy; 51% agreed or strongly agreed that the worst of the economic downturn has passed and "things will only get better"; Turkey ranked first with 54%; the U.S. trailed with 36%

But Canadians will remain conservative over the next year:

  • 90% of Canadian consumers report they'll spend the same or less this year compared to last year
  • 44% will decrease their spending

The root cause of Canadian consumer conservatism; many Canadian households are facing increasing financial pressure because of debt:

  • Canadian households are currently stretched to the max and are holding record levels of debt; between 2008 and the end of 2010, the average Canadian household grew its credit card balance by 10%, while the average U.S. household reduced its credit card balance by 18% over the same time period
  • Canadians did not modify their spending behaviour as much as Americans over the downturn; Canadians' continued spending helped fuel Canada's economic recovery -- but now they're being forced to cut back out of necessity
  • Americans, in comparison, fundamentally changed their spending behaviour during the downturn, significantly increasing their personal savings rate, and now feel comparatively less pressured than they did two years ago; Americans' personal savings rate rose by 4.2 points between the pre-crisis low and the end of 2010; Canadians' savings rate only grew by 2.3 points during that period

Through the downturn, Canadian consumers have adopted a "bargain hunting" mindset and conservative shopping habits that appear to be here to stay:

  • 75% of Canadian consumers report spending more time shopping around for better prices
  • 75% report buying "fewer things" over the past 12 months

Canadians are savvy shoppers; compared to consumers in over 20 countries around the world, Canadians rank second on propensity to buy products "on deal":

  • 86% of Canadians consumers report to have bought more often "on deal" over the past 12 months
  • Canada ranks second only to Italy in deal-hunting and outranks all of its economic peers in the Americas, Europe and Asia

Since the downturn, Canadians have increased their frugal behaviour while Americans have become more relaxed; Canadians plan on continuing this frugal behaviour over next 12 months:

  • "Cutting spend on non-essential items": The number of Canadians who said they planned to do this increased six points between Q1 2009 and Q1 2011; the number of Americans who said the same thing dropped 19 points during the same period
  • "Deferring major expenses that can wait": The number of Canadians intending to do this rose five points over two years ago; the number of Americans dropped 10 points
  • "Plan to continue buying products on promotion over next 12 months": The number of Canadians who expressed this intention is up 11 points compared to two years ago; the number of Americans is down one point in the same period
  • "Spend more time 'cross shopping'": The number of Canadians saying they plan to do this is up 10 points compared to two years ago; the number of Americans expressing the same is down four points

This behaviour is even more pronounced in Canadian women than men:

  • Women were more likely than men to pursue each of five bargain hunting behaviours tested in the survey
  • For example: "Deferring major expenses that can wait": 77% of women reported this, versus 62% of men
  • This observation becomes even more important, given BCG data that suggest that women control more than 70% of household spending

"Canadian consumers spent more aggressively during the downturn than their American counterparts, which fueled Canada's economic recovery. But now they find that they are forced to cut back," Mr. Grevler said. "Americans, in comparison, fundamentally changed spending behaviour through the downturn, and significantly increased their personal savings rate. They now feel much less pressured than two years ago."

About the Survey Methodology

The Household Spending survey on Canadian consumers' sentiment and spending behaviour was conducted online by BCG through early April 2011. The survey focused on 1,000 adults aged 18 and older who do the majority of shopping for their household. The same survey was fielded with 20,000 adults in 20 countries globally in the same time frame, and represents one of the largest global studies of consumer sentiment ever conducted.

All sample surveys and polls, whether or not they use probability sampling, are subject to multiple sources of errors that are most often not possible to quantify or estimate. These include errors associated with sampling, coverage, nonresponse, wording of questions and response options, and post-survey weighting and adjustments. The margin of error for this survey is as high as 3.8 percent. All that can be calculated are different possible sampling errors with different probabilities for pure, unweighted, random samples with 100 percent response rates. These are only theoretical: no published polls come close to this ideal.

To receive a copy of the survey findings or to arrange an interview with one of the authors, please contact Alexandra Corriveau at +1 212 446-3261 or

About The Boston Consulting Group

The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 74 offices in 42 countries.