Canadians new normal may involve less discretionary spending

Possibly not good news for a Canadian restaurant industry already reeling from the COVID pandemic. Statistics Canada says that a significant proportion of Canadians expect to change the spending habits they had prior to the pandemic. Changes to expected spending depended on the item under consideration. In general, Canadians were less likely to signal a change to spending on more essential items (such as housing, medicine, utilities and groceries) than they were on more discretionary items (such as eating at a restaurant, entertainment or recreation).  More often where there was an expected change in their spending, respondents said they would spend less than they did prior to the pandemic

The largest proportions of Canadians who indicated that they wanted to reduce spending were often in areas related to discretionary spending. The category that had the highest proportion of Canadians stating that they expected to spend less compared to prior to the pandemic was eating at a restaurant, with 51% saying so. This was followed by entertainment (37%), clothing or apparel (32%), recreation (32%), and ordering take-out food (31%).

One spending category that had a higher proportion of people stating that they would be spending more rather than less was groceries. In this category, 19% of respondents reported that they would spend more, 10% said that they would spend less, and 7 in 10 stated that they would spend about the same. These results are not surprising, given that a significant proportion of respondents stated that they would spend less on eating at restaurants and ordering take-out food, thus increasing the demand for groceries. The most recent Consumer Price Index release also reported that the price of certain food items increased in recent months.

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Other spending categories that had more people saying that they would be spending more rather than less were education (with 18% expecting to spend more and 12% expecting to spend less), utilities (16% vs. 7%), housing (8% vs. 5%), and medicine (5% vs. 4%).

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