Canada’s holiday retail spending increased in 2025, driven by older and higher-income consumers, while Gen Z and millennial reduced spending and relied more on credit, highlighting a growing K-shaped economy.
Holiday spending in Canada rose again in 2025, but the gains were uneven across age and income groups. New data shows that older and wealthier Canadians increased their retail spending during the holiday season, while younger shoppers pulled back amid financial pressure.
According to figures released on December 23 by Visa Canada, holiday retail spending rose 4.4 per cent year over year, adjusted for inflation, across all payment methods. Growth was led by clothing, accessories, and essential general merchandise. However, spending during Black Friday—a period typically favoured by younger consumers—declined.
Retailers targeting higher-income customers reported strong sales momentum. Montreal-based footwear brand Maguire Shoes recorded its best sales month in company history in November, while Quebec custom lighting company Luminaire Authentik posted a 39 per cent year-over-year increase in pre-holiday sales.
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Toronto-based home furnishings retailer Socco Living also reported rising sales despite exiting the U.S. market due to unpredictable customs charges.
Interest in Boxing Day shopping remained stable. About 25 per cent of Canadian adults plan to shop Boxing Day sales, unchanged from last year, according to Vividata. Participation is higher among consumers aged 45 to 49 and households earning between $100,000 and $150,000 annually.
Despite this, Black Friday continues to dominate the holiday shopping calendar. Payment processor Moneris reported a 25 per cent jump in spending compared with the prior week, although total Black Friday spending was down four per cent from last year.
Economists describe the trend as a “K-shaped” economy, where higher-income households continue to spend confidently while lower-income consumers cut back. Apparel retailer Group Dynamite reported nearly 40 per cent year-over-year revenue growth in the third quarter, supported by resilient upper-income shoppers.
Commercial real estate firm JLL Canada estimates average holiday spending will rise eight per cent to $1,646 per person, driven almost entirely by affluent consumers. However, much of the growth is concentrated in travel and experiences, while spending on traditional gift items is expected to soften.
Younger consumers face the sharpest pullback. PwC Canada estimates Gen Z shoppers plan to spend 34 per cent less this holiday season, with nearly 60 per cent relying on credit. Millennials are expected to reduce spending by 11 per cent. In contrast, baby boomers remain confident and are more willing to pay a premium for Canadian-made products.
