The year’s most significant shopping season is upon us!
This particular year, however, we’re entering a more critical time than previous shopping seasons. Given recent retail trends and circumstances – rising prices, a potential recession, and high levels of uncertainty driving Canadian consumers – we are all watching very closely: Will this holiday season make or break the retail sector?
The current retail climate
Over the past year, financial conditions have tightened globally in response to policies aimed at reducing inflation. Indeed, 2023 kicked off with a less-than-stellar start: Retail layoffs spiked 3,225% year-over-year, according to Challenger, Gray & Christmas data.
Retailers then announced nearly 56,000 job cuts through the end of August – a shocking 524% increase compared to last year, according to Retail Dive. These conditions have, in turn, begun to expose business vulnerabilities – specifically, in business models which rely heavily on low interest rates and low volatility environments.
The tightening of credit conditions make it even trickier – and pricier – to obtain new credit. And because small and medium-sized businesses account for around 85% of Canadian private employment, financial stress in this sector could easily trickle down into household budgets as well.
The current state of Canadian consumers
Indeed, according to a Canadian Consumer Insights survey, nearly half (47%) of Canadians interviewed said they’re either “very or extremely concerned” about their personal finances, with 70% cutting back on non-essential purchases in response.
However, according to Stats Can, shoppers are still spending – albeit with greater caution and sensitivity towards price, and an increased desire for enhanced retail experiences.
What can businesses do?
To meet these evolving consumer trends, businesses will benefit from differentiating their brands – by reducing costs, and creating more seamless experiences for shoppers. But what about smaller businesses, the ones really feeling the squeeze this time of year? How do you cut costs while retaining customers?
That’s where a broker can be your best tool.
At GSA, we pride ourselves on personalized service, no matter the size of your business. We hold regular meetings with all credit insurance providers to ensure consistent and frequent market intelligence, and work with you to navigate the market.
So whatever the upcoming retail season brings, we can help you weather it – and position you for future growth. Contact us today for a free consult.