The holiday season is critical for retailers as many receive much of their annual revenue during the period from Black Friday in late November through to the new year.As Canadians struggle to buy essentials, many consumer discretionary stocks are less attractive to investors – and the federal government’s GST holiday likely won’t help.by another 50 basis points this month and the holiday shopping season in full swing, Canadians aren’t rushing to open their wallets.
“The consumer is cautious, price-sensitive and value-seeking,” she adds. But it’s not bad news across the board. “There are pockets out there where, even though the backdrop is challenging and the consumer is strained, retailers are benefiting.”is another standout retailer as consumers get more frugal and spend with purpose, says Ali Pervez, vice-president, portfolio manager and research lead of equities at CI Global Asset Management.
The pressure on consumers is reflected in staggeringly high consumer debt levels. Last month, TransUnion reported consumer debt in Canada rose to a record high of $2.5-trillion in the third quarter. The one subsector within retail that might see an uptick in spending from the GST holiday is restaurants. Industry group Restaurants Canada says the GST relief is expected to bring in $1.5-billion in additional revenue.