“While we’re seeing a slight acceleration in consumer spending, the latest retail trends clearly demonstrate the impact of decades-high inflation on consumer spending,” said Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Incorporated. “As retailers grapple with excess inventory and supply chain constraints, it’s likely that promotional activity will continue to be an important strategy for retailers to continue to drive e-commerce sales. This will be especially important in the face of rapid price increases and consumers prioritizing necessities.”
Spending growth in July compared to pre-pandemic levels in 2019, was the highest experienced thus far in 2022, reflecting increased prices as well as continued consumer demand. Of note:
- Consumers continue to spend, with inflation’s impact varying across sectors: Despite high inflation, consumers continue to spend on wants. The Apparel sector, for instance, saw sales up +17.1% YOY in July while Restaurant growth (+4.3% YOY) showed demand for experiences as Canadians continued to visit restaurants during summer’s busy season.
- E-commerce sales climb amid major summer sales events: E-commerce sales remain elevated, up +5.4% YOY/ +74.7% YO3Y, with major summer sales and promotions helping entice shoppers to splurge (and save) with online deals.
- High season for vacation, with road-trippers continuing to spend at the pump: With gas prices still elevated across the country and summer vacation plans top of mind for Canadians, Fuel & Convenience spending rose +28.0% YOY / +40.4% YO3Y.