How holiday spending plans could reflect a divided ‘K-shaped’ economy

Holiday shopping amid inflation and tariffs means many Canadians expect to take on more debt in what one retail analyst says demonstrates concerns about a 'K-shaped economy.'

Holiday shopping amid inflation and tariffs means many Canadians expect to take on more debt in what one retail analyst says demonstrates growing concerns about a “K-shaped” economy.

A newly released Harris Poll survey, conducted on behalf of NerdWallet Canada, asked about 1,000 adult Canadians in October about their holiday spending plans.

The report found Canadians plan to spend an average of $708 on holiday gifts, which is up slightly from $698 last year.

Twenty-six per cent of shoppers said they plan on spending over $1,000, while 46 per cent plan to spend less than $500, and 15 per cent said it’s less than $100.

“This year’s modest bump in average spending likely reflects a small but influential group of big spenders,” the survey says.

“The reality for a larger portion of Canadian gift-givers is a tighter budget.”

This also comes as experts have described a “K-shaped” income and spending divide over recent months, where higher-earning households continue or increase their spending while lower-income households dial back their budgets under pressure from factors like inflation.

“Some people have done really well over the last five years, maybe because they’ve had money in the stock market or they’ve gotten promotions at work. Then there’s some people who may be have had a much harder time over the last five years because inflation has crept up, and their wages feel stagnant,” says retail analyst Bruce Winder.