LESS MERRY
RETAILERS BRACE FOR DROP IN HOLIDAY SHOPPING, CONTINUING SHIFT TO ONLINE PURCHASING.
The expected surge in online shopping during the holiday season is stoking concerns in the retail sector that Canada’s courier network won’t be able to keep up with deliveries.
Deloitte’s Holiday Retail Outlook released on Tuesday found that the average Canadian shopper is planning to avoid stores and buy more online, continuing a dramatic shift toward e- commerce that has strained courier services throughout the pandemic.
“The infrastructure is being stretched to the limit,” Diane Brisebois, chief executive at the Retail Council of Canada, said. “That is going to be probably the story of the holiday season.”
This week, The Wall Street Journal reported that some major couriers are already telling their clients that they’re running out of holiday shipping capacity.
Between American Thanksgiving on Nov. 26 and Christmas, the United States delivery system may be over capacity by as many as seven million packages per day, the Journal reported on Monday, citing estimates from ShipMatrix Inc., a software company that focuses on shipping data.
In Canada, Purolator Inc. is hiring 1,600 new staff and adding 10 per cent more delivery vehicles in order to meet demand during the 2020 “super peak” season, chief executive John Ferguson announced on Monday.
Fedex Canada is also expanding capacity in advance of what it believes will be record e- commerce sales, spokesperson James Anderson said in an email. But he still suggested consumers “shop and ship early to avoid delays during this unprecedented surge.”
Deloitte’s holiday forecast surveyed 1,000 Canadian consumers in September and found that the average shopper will spend roughly 44 per cent of their holiday budget online, up eight percentage points from last year. In addition, shoppers will only visit an average of 4.6 bricks-and-mortar stores, down from 6.4 stores last year.
“The good news is, retailers and Canada Post and all the courier companies have had months to get ready for this,” said Marty Weintraub, who leads the national retail consulting practice at Deloitte Canada. “Are they going to be fully ready? Probably not. Are they going to be caught flat-footed? I hope not and expect not.”
Roughly a third of respondents in the Deloitte survey said they plan to spend less than last year, with the average holiday budget expected to drop 18 per cent to $ 1,405, from $ 1,706 in 2019. The average budget for gifts dropped to $ 447, from $ 485 last year. A bit more than half of the respondents planned on buying presents for five people or less.
But the largest budget declines, unsurprisingly, are for travel and dining. The average budget is also including 86- per- cent more in charitable donations.
“Perhaps to avoid crowds, long lines, and potential exposure to COVID-19, twothirds of Canadians plan to start their holiday shopping before Black Friday this year,” the report said.
“In fact, it seems, they don’t see holiday shopping as a fun experience to cherish any more — it’s just a task to be done as quickly, efficiently, and safely as possible.”
Deloitte’s findings were less dramatic than a Pricewaterhousecoopers ( PWC) survey released last week, which forecast a 30.7- percent dip in the average budget to $1,104, with spending on travel down 58.5 per cent and entertainment down 18.6 per cent.
In Pwc’s survey of 1,000 consumers conducted in late August, 86 per cent said they planned to spend “the same or more” than last year, a drastic reversal from 2019 when 83 per cent planned to spend the “same or more” than the previous year.