Early signs of softening discretionary spending

  • Total cardholder spending held steady in December, but year-over-year growth in Q4 (+8.9%) was the weakest since the recovery began in early 2021.
  • Holiday spending was largely in line with year-ago levels (+1.5%), implying weaker real spending in the face of higher prices.
  • The moderation in accommodation spending was interrupted by holiday travel, with traveler spending rebounding briefly at the end of December.
  • But real restaurant spending pulled back in the fourth quarter—an early sign that higher interest rates and decades-high inflation are weighing on consumer discretionary spending.
  • With prices trending higher, growth in Canadian purchase volumes (the number of transactions) weakened drastically in December across both essential and discretionary purchases.


See previous versions:

  • Black Friday marked a strong start to the holiday shopping season in Canada as sales surged higher. Spending on electronics is running below prior holiday shopping periods, but spending on apparel, gifts, books, music, and entertainment is strong.
  • So far, holiday jewellery spending is 6% below 2021 levels, but previous trends suggest a boost in purchases from last minute shoppers may yet arrive.
  • Early signs suggest a moderation in accommodation spending is continuing though restaurant spending is still running strong.
  • Spending is expected to soften in 2023 as interest rate hikes and inflation cut further into household purchasing power.

* Holiday goods spending categories have been revised from the previous iteration and include purchases classified by granular sub-categories within the following NOMI categories: Books, Journals, Music, & Photography, Record Shops, Apparel, Shoes, & Accessories, Clothing, Department Stores, Electronics. Gift, Hobby, Toy, & Game Shops, Jewellery, Shoes, and Specialty Retail.


  • Canadian cardholder spending plateaued in recent months—but nevertheless remains above year-ago levels as we head into the crucial holiday shopping period.
  • Data over the next few weeks will provide a critical indicator of just how much inflation and higher interest rates have eaten into Canadians’ purchasing plans.
  • Nearly 20% of holiday shopping purchases are typically made over the next week, coinciding with U.S. Black Friday and Cyber Monday promotions that have increasingly spilled over the border to Canada.
  • We expect spending to remain strong through the holiday period—but continue to look for a slowdown in early 2023 as higher interest rates and inflation cut into household purchasing power.

The early bird catches the deals

There are two peak holiday shopping periods. The first takes place around U.S. Black Friday and Cyber Monday promotions. The second comes in the weeks leading up to December 24th. After Black Friday, December 23rd is the second-busiest shopping day of the year.

  • In pre-pandemic years, the first peak shopping period (late November) accounted for over 40% of total holiday shopping volumes. Late shoppers accounted for a slightly smaller share of total purchases.
  • The highest volumes of electronic goods purchases were typically reported on Black Friday and Boxing Day. And the biggest day for jewellery sales was December 24th (jewellery sales are already ticking up this year.)

Hate crowds? Shop in early December

  • The first weekend in December is typically one of the quieter holiday shopping weeks. At this point, the early birds have secured their Cyber Monday deals and the last-minute shoppers still have a few weeks before panic buying ensues.
  • And don’t wait to buy your turkey! Grocery shopping volumes are highest in the two days leading up to December 25th.

Or shop from home

  • During the pandemic, roughly half of holiday gift purchases were made online. That compares to just 25% in 2018.

Home for the holidays?

  • More Canadians are packing their bags this year following pandemic disruptions in both 2020 and 2021. Travel spending is tracking much stronger ahead of the holiday period.

*Holiday goods spending includes purchases classified by the following NOMI categories: Art & Galleries, Books, Journals, Music, & Photography, Music, Record Shops, Apparel, Shoes, & Accessories, Clothing, Computer Software, Department Stores, Electronics. Gift, Hobby, Toy, & Game Shops, Jewelry, Shoes, Specialty Retail, Data Services.


  • Any growth in spending is now largely a function of price growth rather than bolstered consumer demand.
  • Real grocery spending is only slightly above pre-pandemic levels, while nominal spending is up 20% due to decades-high inflation. Indeed, prices of food at grocery stores were up 11.4% in September.
  • Average nominal spending on gas is trending slightly higher, as prices rebound from September lows. Real spending is holding steady.
  • Home-related spending continues to plateau as the housing market correction unfolds. Consumers put renovations and home improvements on pause.
  • Travel spending continues to flatten out after the summer boom and hotel accommodation is levelling off.


  • Card spending on discretionary goods and services continues to plateau following a spring surge.
  • Restaurant spending is holding up well despite persistent inflationary pressures.
  • But hotel spending (and broader traveller accommodation) is moderating from a summer spending boom.
  • And total travel spending is leveling off alongside airport traffic into September and October.
  • Both real and nominal gas spending moved higher at the beginning of October alongside prices that jumped 11.6% month-over-month. Real spending on gas is now above pre-pandemic levels for the first time this year.


  • Hurricane Fiona weighed heavily on cardholder spending in Atlantic Canada at the end of September.
  • However, overall cardholder spending held steady at 30% above pre-pandemic levels.
  • Travel spending is cooling off as the summer travel season comes to a close.
  • Nominal spending on gas fell (-6.7% in September) alongside gas prices (down 8%).
  • Canadians completed more grocery and restaurant transactions in September, though total restaurant spending held flat.


  • Cardholder spending remains 30% above pre-pandemic levels in September, with persistent strength in the restaurant and travel sector.
  • Home-related spending remains above pre-pandemic levels, but is trending lower as the housing market cools.
  • Purchases of essentials and discretionary items levelled off into the fall with discretionary spending settling below post-lockdown highs.
  • Restaurant spending continues to flat-line though it remains well above pre-pandemic levels.
  • Average spending per transaction at gas stations is falling alongside prices.


  • Total cardholder spending continued to level off through August—though it remains 30% above pre-pandemic levels.
  • Travel spending flattened into late summer, hovering above pre-pandemic levels as airport traffic continues to recover.
  • Real spending on traveller accommodation trended lower; with higher nominal spending stemming entirely from elevated prices.
  • Average gasoline transaction values are now down 11% from their peak due to lower prices.
  • The number of transactions at grocery stores declined into August, while the volume of restaurant purchases held steady.


  • Though it remains 30% above pre-pandemic levels, total cardholder spending continued to level off into August.
  • Restaurant spending (excluding price changes) have edged lower as inflation takes a bite out of consumer purchasing power.
  • The post lockdown travel booking frenzy has also plateaued as spending on hotels flattens out and the price of accommodation rises.
  • Canadians are still filling up their tanks despite fuel price fluctuations. Real spending on gasoline has held steady.


  • Total cardholder spending remained 30% above pre-pandemic levels in July but has edged lower so far in August.
  • Average spending (per visit) at gasoline stations dipped on lower prices – total spending on gasoline still below pre-pandemic levels controlling for price increases.
  • Total restaurant sales flattened in July, with the number of transactions down 3.5% this past month.
  • Canadians are making more grocery store purchases. Compared to 2019, grocery transaction volumes trended higher in July (now 9.5% higher than 2019).
  • But our cardholder data has yet to show that Canadians facing soaring inflation are spending a greater share of their income on essentials. In fact, consistent with pre-pandemic levels, roughly one-third of total cardholder spending can be accounted for by spending on groceries, utilities, and communications.


  • Cardholder spending still running ~30% above pre-pandemic levels, but easing modestly in July
  • Both goods and services spending growth levelled off into July
  • Average transaction values at the pump have fallen 3.5% alongside a 9% drop in gasoline prices.
  • Both real (excluding price changes) and nominal restaurant spending has plateaued with higher prices accounting for roughly one-third of the increase in restaurant spending from pre-pandemic levels
  • Pent up travel demand persists as airports struggle with labour shortages


  • Total spending was flat in June, holding steady at 30% above pre-shock levels.
  • Canadians continue to spend more at the pump — on average $60 in June per transaction, up from $57 in May. All of this increase is due to rising prices.
  • Inflation is also responsible for one third of the growth in restaurant spending.
  • But Canadians continue to dine out more frequently—spending 30% above pre-pandemic levels—as growth in grocery store spending slows.
  • A surge in travel and hospitality purchases has yet to subside, even as goods spending flattens out.


  • Canadians are still buying more than they did before the pandemic—but early data suggests spending is plateauing.
  • After a steady climb, total cardholder spending remains 30% above pre-pandemic levels in June—the fourth consecutive month at this level.
  • Canadians continue to make more purchases at restaurants, despite higher prices.
  • But the recent surge in domestic travel spending shows signs of moderating.


  • Total card spending surged 32% above 2019 (pre-pandemic) levels in May.
  • Spending on goods has plateaued at high levels but demand for travel and hospitality services continues to soar.
  • Rising purchases at restaurants are not just a result of higher prices. The number of transactions is increasing too.
  • Spending on international travel rose 36% from pre-pandemic levels this month.
  • Average spending at the pump continued to trend higher through May.


  • Total card spending continues to run roughly 30% above 2019 (pre-pandemic) levels.
  • Advance bookings for travel are surging.
  • For the first time since the pandemic, spending on travel and hospitality is overtaking purchases of merchandise.
  • Average spending at the pump keeps climbing with surging gas prices.
  • Even as some pandemic habits fade, Canadians continue to buy more groceries online.


  • Card transactions held firm at 30% above pre-COVID (2019) levels in April—with strong momentum carrying into May.
  • High contact services spending is closing the gap with already strong goods purchases as shoppers opt for more visits to restaurants and hotels.
  • Little evidence exists to suggest higher inflation is undermining spending momentum on essential items like groceries.
  • But higher gas prices are exacting a hefty toll at the pump, particularly as Canadians travel more, and show a greater interest in cross-border travel.


  • Canadian household spending remains elevated in April, climbing 30% above pre-COVID levels.
  • Goods sales remained strong, driven by increases in clothing, furniture and grocery purchases.
  • On the services side, spending on travel and hospitality continues to surge back as the economic impact of the pandemic subsides.
  • Higher food prices have yet to curb consumer appetites for dining out. Both the number of transactions and amount spent on restaurants is up.


  • Aggregate spending is powering into spring, holding ~ 30% above pre-shock (2019) levels—and more than 10 percentage points above January when Omicron restrictions weighed on activity.
  • A global increase in oil prices pushed up the average sales amount at gas stations, but the broader lift in spending is not just a result of inflation. The number of transactions has also increased.
  • Higher prices have pushed up ‘non-discretionary’ costs (food, shelter, gasoline, etc.), but discretionary travel and hospitality spending continues to strengthen.
  • Travel spending surged back above pre-pandemic levels as more families invested in March Break holidays.


  • Travel spending touched pre-COVID levels for the first time as pandemic restrictions eased.
  • The domestic tourism recovery continues to outpace international travel but Canadian spending on restaurants and hotels abroad has also been rising.
  • Spending on services overall continued to recover alongside another increase in purchases of physical merchandise.
  • Surging prices and geopolitical uncertainty from the Russian invasion of Ukraine are headwinds for the economy. But firmer job markets, easing COVID-19 restrictions, and pent-up demand for travel/hospitality services are supporting strong near-term spending.


  • Overall household spending quickly shook off the impact of the new COVID-19 variant and is now nearing pre-Omicron peak growth rates.
  • Travel spending rebounded after plunging in December and January.
  • Shopping at retail outlets built on late January momentum, and is tracking a gain in February.
  • The reopening of indoor dining rooms in Quebec and Ontario (in time for Valentine’s Day) allowed a rapid bounce back in restaurant sales.
  • The post-Omicron spending surge aligns with views that the macroeconomic impact of Omicron will be smaller and shorter-lived than previous waves, leaving the Bank of Canada free to begin hiking interest rates on March 2.


See the archived COVID Consumer Spending Tracker here.

RBC’s consumer spending tracking report uses RBC Data & Analytics’ proprietary database of anonymized card transactions by Canadian clients. The data are an accounting of merchant transactions that are divided into various spending categories covering tens of millions of weekly card transactions worth billions of dollars each week. Transactions, both in person and online, are classified into 11 broad spending groups: Dining, Education, Finances, Groceries, Health, Household, Shopping, Transport, Travel, Utilities, and Other. Within each group, the data are further classified: for example, shopping covers merchants classified as clothing stores, hobby shops, electronics stores, and jewelers, among others. We exclude purely financial transactions such as cash advances and insurance from spending.

We examined changes in the value of all transactions in these areas using a 7 day rolling sample starting January 1st of each year that is indexed to pre-covid levels which are calculated as the average spending for the month of February 2020. To examine the impact of seasonal factors, we also show each’s year spending profile which depicts monthly trends in spending. Online spending volumes are estimated based on the presence of an RBC card at the time of the authorization.

Protecting your privacy and safeguarding your personal information is a cornerstone of our organizational ethics and values and will always be one of our highest priorities. The underlying data for this analysis was aggregated based on transaction date, region and merchant category, and cannot be used to identify any individual client or merchant. For additional information please visit www.rbc.com/privacy.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.