By Mark Potter, Account Specialist, Canada Retail, Circana,  and Jasmine Martin, Account Associate, Consumer Technology, Circana

The 2023 holiday season capped off a year of declining retail sales for Canada. Dollar sales for the final seven weeks of the year were down 3% compared to 2022, as consumer demand fell for almost every industry tracked by Circana in Canada. If not for the beauty industry, which continued its meteoric rise over the holidays, retail sales would have declined twice as fast at 6% less than last year.  

Black Friday week, one of the most important weeks of the season, illustrated these challenges – consumers did not show up in the numbers hoped for by retailers. One reason for the reduced demand was a lack of significant deals, suggested Circana’s Canadian Tech Analyst Dave Adamchick. “Black Friday and Cyber Monday promos were announced far in advance of their traditional dates, deflating some of the urgency of the event,” Adamchick said. “Especially during this macro environment, consumers were shrewdly watching for the best deals, and clearly held out if the deals weren’t especially compelling.” 

The impacts from the poor performance of Black Friday may have led to a successful Boxing Day, however. Pent-up consumer demand, combined with retailers trying to clear out unsold inventory, led to a strong performance over the last week of the year. Boxing Day week saw an increase of 5% in units sold and was the only week of the season when demand grew. 

Holiday Season Winners and Losers

The bright spots this holiday season aligned with the success stories of the year at large: feel-good gifts, notably personal care and beauty, as well as innovative activities that transcend age like VR/AR hardware and accessories and building sets in toys. Previous analysis has linked an increase in affordable feel-good purchases to economic stress and uncertainty, as a replacement for larger purchases that feel riskier. However, with beauty’s continued dominance at the top of the leaderboard, we must ask: How long can the feel-good push last?

Top 10 Dollar-gaining Categories
VR/AR Hardware & Accessories
Curling Irons/Stylers
Skincare, Total Face
Makeup, Total Face
Portable Beverageware
Makeup, Total Lip
Skincare, Total Sets & Kits
Building Sets

Source: Circana, Retail Tracking Service, 7 Weeks Ending December 30, 2023

Industries included: Tech, Footwear, Beauty, Small Appliances, Housewares, Toys, & Office Supplies

Many of the categories driving declines in holiday 2023 were those not typically associated with gift-giving, which might speak to a tighter wallet than in previous holiday seasons where consumers had the budget for non-gifting expenses. TVs were the fastest-declining category this holiday season showcasing the trend of tech becoming less central to holiday retail. Other top-declining categories, such as cold-weather boots and heaters, suffered from milder weather than is usually seen in Canada during the holiday period.

Top 10 Dollar-declining Categories
Tablets & E-Readers
Cold/All Weather/Hunting/Fishing Boots
Sports Toys
Fashion Boots
Massaging Appliances

Source: Circana, Retail Tracking Service, 7 Weeks Ending December 30, 2023

Industries included: Tech, Footwear, Beauty, Small Appliances, Housewares, Toys, & Office Supplies

We know that tough economic times have made consumers increasingly price-sensitive, but not necessarily purchase-averse. The week of Boxing Day 2023 was the only major period of sales growth, far surpassing Black Friday week, in part because shoppers waited for the deeper discounts. This means that a promotion-focused approach might be best for declining categories, where shoppers need an extra nudge. For gaining categories, such as feel-good products, there’s less of a need for deep discounts because people are more willing to self-gift or invest in affordable luxuries as gifts. 

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