With 42% of Canadians reporting a worse financial position compared to a year ago, the impact of inflation and economic uncertainty is undeniable. Our Mid-Year Consumer Outlook report, Canada edition, delves into the key trends shaping consumer behavior, from the rise of discount shopping to the increasing adoption of health and wellness products.
What does this mean?
State of Consumers
Canadians are feeling the financial strain. A significant 42% report being worse off than last year, surpassing the global average. Key concerns include soaring food prices and escalating housing and utility costs.
Consumption Drivers
While inflation is easing, its lingering effects continue to impact consumer spending. Despite a population increase, CPG volume remains stagnant, suggesting consumers are cutting back due to rising prices.
Financial Polarization
Facing economic uncertainty, Canadians plan to adopt a cautious approach to spending. They intend to maintain grocery spending while cutting back on discretionary expenses like dining out, clothing, and travel. To maximize value, consumers will prioritize fresh produce and perimeter items, driving growth in these categories.
Redefining Discount
To combat rising prices, consumers are increasingly turning to discount retailers and private label brands. Manufacturers must adapt by offering flexible packaging options, catering to both bulk buyers seeking value and those prioritizing affordability. Additionally, strategies like stockpiling and loyalty program utilization are gaining popularity among Canadian consumers.
Trends to Watch
A growing number of Canadians (22%) are using weight loss medications like GLP-1 agonists, which will influence their CPG and food purchasing decisions. While social commerce and AI have the potential for future growth in Canada, current adoption rates lag countries like China.
