Vast majority of Albertans concerned about paying off holiday expenses while retailers extend Boxing Day sales

Retailers have been promoting Boxing Day sales well before Dec. 26 to keep money-conscious shoppers engaged, experts say

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Banners on retail websites may leave Calgary shoppers wondering whether they missed Boxing Day this year.

Rest assured, Boxing Day was still marked on Dec. 26. But with consumers checking their wallets more frequently this year, retailers have been promoting their sales early to attract more shoppers, experts say.

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Dead space between Black Friday and Boxing Day has been increasingly filled with more sales in recent years — a recognition the average consumer has less money to go around, said Travis Koivula, a senior wealth adviser at Island Savings.

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“It feels like there’s been sales basically from the week before Black Friday and it’ll go to the end of the year,” Koivula said.

That observation was backed up by Mark Parsons, vice-president and chief economist at ATB Financial, who said spending is beginning to lag despite major population gains in Alberta that would otherwise prop up total spending.

“I think there’s retailers that are discounting to attract the consumer, given budget-conscious consumers,” Parsons said.

Consumer spending patterns have been slightly more erratic than normal this year, partly due to the effect of high interest rates and persistent inflation.

Despite those challenges, Black Friday and Cyber Monday sales met yearly averages, which some said was a result of shoppers attempting to spread Christmastime expenses over several weeks — and paycheques — to soften the blow. Those November sales have also generally increased in popularity since 2010, Parsons said.

Spending on jewelry, clothing, electronics and alcohol often see upticks during this time of year, he added.

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Average credit card balance in Canada surpasses $4,000

Meanwhile, recent reports from Canadian financial institutions shine a spotlight on Albertans’ holiday spending this year.

The average credit card balance in Canada is more than $4,000, according to an early December report from TransUnion, a credit reporting agency.

And on average, Albertans believe it will take three months to pay back their holiday bills, while a quarter aren’t confident they’ll be able to pay off those bills on time, according to a recent report from BMO Financial Group.

Those insights also show more than four in five Albertans (82 per cent) are concerned about their overall financial situation, while 61 per cent are worried about keeping up with monthly bills.

Retail sales have levelled off in Alberta despite record-setting population gains, noted an ATB Financial report published on Dec. 21.

“Higher interest rates bite with a lag, and we’ve seen that on full display with the consumer this year,” Parsons wrote.

So far in 2023, spending in the province has posted a 4.9 per cent gain as of October — higher than the national average of 2.2 per cent — which has been partly driven by auto sales. On that front, Parsons said there’s been “pent-up demand” for vehicles coming out of the pandemic, though other luxury purchases are often put on hold during periods of high interest rates.

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ATB is among many institutions predicting interest rates may begin to fall by midsummer 2024. But just as consumers’ reaction to high interest rates takes time to settle in, small drops in borrowing rates won’t provide immediate relief to the Canadian or Alberta economies, Koivula said.

“Until we have a period of stable inflation and people’s wages catch up, I think it could be a couple of years where people are really feeling constrained on their spending,” he said.

“It’s going to cause a lot of folks to re-examine where they spend their money and how they spend their money.”

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X: @mattscace67

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