Despite Signs of Optimism About the Canadian Economy, Canadian Consumers Are Not Out of the Woods Just Yet -- They Continued to Take on Record Debt Through the Recession and Didn't Modify Spending Behaviour as Much as Americans; Now, Canadians' Shopping Skills and Willingness to Buy "on Deal" Will Mean Cutbacks, According to New Boston Consulting Group Study
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:
But Canadians will remain conservative over the next year:
The root cause of Canadian consumer conservatism; many Canadian households are facing increasing financial pressure because of debt:
Through the downturn, Canadian consumers have adopted a "bargain hunting" mindset and conservative shopping habits that appear to be here to stay:
Canadians are savvy shoppers; compared to consumers in over 20 countries around the world, Canadians rank second on propensity to buy products "on deal":
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:
This behaviour is even more pronounced in Canadian women than men:
"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 corriveau.alexandra@bcg.com
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.