TORONTO — Canadian Tire Corp. mentioned it. So did Tim Hortons parent company Restaurant Brands International.
Ditto Roots Corp. and Alimentation Couche-Tard Inc. 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.
Many say a mix of inflation and higher interest and mortgage rates are to blame, as they rankled budgets for much of last year and have slowed consumer spending well into this year. But many agree the back half of 2024 could see some of those concerns ease, especially if the Bank of Canada begins cutting its key lending rate over the summer. “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.
She’s seen consumers spend the bulk of the year so farseeking deals and said no income bracket has shied away from turning to value chains to stretch their dollar even further. “That aspirational and luxury customer is also shopping at Walmart,” she said. Amlani, however, sees signs that consumer spending is headed for a rebound.
Travel spending is picking up and her retailer clients have seen “a big lift” in sales of trendy items versus basics, which tends to be a sign that discretionary.
