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The Budget Shopper - Canada - December 2017

Although most engage in budget-seeking behaviours, the majority of Canadians tend to keep an eye on their finances rather than stick to a strict budget. The flexibility in approach to monitoring their finances leads to some flexibility when shopping and receptiveness to deals found while engaging in the task. As consumers navigate between price and brand loyalty, value offerings from conventional retailers are working to attract attention. This means that avenues such as private label brands hold the potential to keep consumers engaged and loyal.
This Report explores the shopping behaviour and attitudes of Canadian shoppers and the degree to which the consumers fit under the label of the ‘budget shopper’.

This report examines the following issues:

  • The competition for the ‘budget-shopper’ is heating up
  • Virtually all consumers are ‘budget-shoppers’ to some degree
  • Few Canadians are doing pre-work to find deals

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Table of contents

  1. Overview

    • What you need to know
    • Executive Summary

      • The issues
        • The competition for the ‘budget-shopper’ is heating up
          • Figure 1: Retailers shopped (any rank), September 2017
        • Virtually all consumers are ‘budget-shoppers’ to some degree
          • Figure 2: Monitoring finances, September 2017
        • Few Canadians are doing pre-work to find deals
          • Figure 3: Pre-shopping budgeting actions, September 2017
        • The opportunities
          • Enabling the spontaneous response to sales to generate action
            • Figure 4: Budgeting actions taken while shopping, September 2017
          • Women love the thrill of the hunt, reward them for sharing
            • Figure 5: Monitor spending because of enjoyment of seeking the best price, women vs men, September 2017
          • Private labels are a win for consumers and retailers alike
            • Figure 6: Attitudes towards private label, September 2017
          • What it means
          • The Market – What You Need to Know

            • Consumers are relatively confident in their financial situation
              • An aging population means a smaller proportion of formal budgeters
              • Market Factors

                • Canadian consumers facing record high debt levels
                  • Figure 7: Monthly movement in selected components of the Canadian Consumer Price Index, seasonally adjusted, September 2014-September 2017
                • The bulk of consumers see their financial situation as healthy or ok
                  • Figure 8: Perception of financial health, February 2016-17
                • Economic factors point to growing confidence in the economy
                  • Bank of Canada actions reflect confidence in the economy
                    • Figure 9: Canada bank rate, September 2012-September 2017
                  • Consumer confidence reflects optimism shown by Bank of Canada
                    • Figure 10: Canada’s unemployment rate, August 2012-August 2017
                  • An older population means shift in budgeting attitude
                    • Figure 11: Population aged 0 to 14 years and 65 years and older, as of July 1, 1995 to 2035*
                    • Figure 12: Monitoring finances, by age, September 2017
                • Key Players – What You Need to Know

                  • Catering to the budget-minded consumer is common practice
                    • All consumers seek value
                      • Technology will help the hunt for deals
                      • What’s Working?

                        • Retailers are actively courting budget-minded consumers
                          • Loblaw actively promoting its discount banners
                            • Figure 13: No Frills Jazz Trio TV Commercial, May 2017
                            • Figure 14: No Frills Aisles Commercial, July 2017
                          • The presence of off-price retailers continue to grow in Canada
                            • Actions speak louder than words: consumers are shopping for discounts
                              • Walmart Canada seeing gains with lower prices
                                • Dollarama performance in Canada exceeds expectations, and is still growing
                                • What’s a Challenge?

                                  • In some ways, virtually all consumers are ‘budget shoppers’
                                    • Figure 15: Budgeting actions, September 2017
                                  • The retail landscape is catering more to budget-minded shoppers
                                    • Companies can offer value above and beyond just pricing
                                    • What’s Next?

                                      • Private label presence grows, with big players Amazon and Walmart stepping up the offerings
                                        • Spotlight on Amazon
                                          • Spotlight on Walmart
                                            • Technology makes it easier for consumers to find and access deals
                                              • Flipp
                                                • Gas Buddy
                                                  • Hopper
                                                    • Drop
                                                      • Checkout 51
                                                      • The Consumer – What You Need to Know

                                                        • Over nine in 10 Canadians monitor their finances
                                                          • Both practical and emotional elements drive finance monitoring
                                                            • It’s a toss-up between price and brand loyalty
                                                              • Relatively few Canadians do pre-work to find deals
                                                                • Conventional grocery stores win out – budgeter or not
                                                                • Monitoring Finances

                                                                  • Virtually all Canadians monitor their spending
                                                                    • Figure 16: Monitoring finances, September 2017
                                                                  • Under-55s: having a budget doesn’t equate to strict adherence
                                                                    • Figure 17: Monitoring finances, by age, September 2017
                                                                  • Flex in following a budget – in their words
                                                                    • Opportunities exist to help under-55s achieve their financial goals
                                                                      • Figure 18: Perception of financial health, by age, September 2017
                                                                  • Reasons for Monitoring Finances

                                                                    • Motivations for monitoring spending are both practical and emotional
                                                                      • Figure 19: Reasons for budgeting, September 2017
                                                                    • Enjoyment varies little by finance monitoring behaviour or income
                                                                      • Women, particularly mothers, enjoy the thrill of the hunt
                                                                        • Figure 20: Monitor spending because of enjoyment of seeking the best price, women vs men, September 2017
                                                                      • Young women are driven by practical concerns
                                                                        • Figure 21: Monitor spending to pay off personal debts, women 25-34 vs overall, September 2017
                                                                      • Managing daily expenses creates immediate needs
                                                                      • Shopping Attitudes

                                                                        • Effort made to seek deals with some allowance for splurges
                                                                          • Figure 22: Attitudes towards shopping, September 2017
                                                                        • Women under-35 more willing to turn to unfamiliar brands
                                                                          • Figure 23: Attitudes towards shopping, women 18-34 vs women 35+, September 2017
                                                                        • Brand cachet likely holds less weight amongst young women
                                                                          • Figure 24: Uniquely J Peruvian Coffee Single Serve, October 2017
                                                                          • Figure 25: Uniquely J Coffee Bar Blend Coffee Ground, October 2017
                                                                        • Consistency in quality is a greater consideration to women over 35
                                                                          • Quebecers are less willing to give into impulse
                                                                            • Figure 26: Agreement with ‘I will splurge on items I really want’, Quebec vs overall, September 2017
                                                                        • Budgeting Actions

                                                                          • Virtually all consumers engage in deal-seeking behaviours
                                                                            • Figure 27: Budgeting actions, September 2017
                                                                          • Sales lead to spontaneous purchases – in their words
                                                                            • Young women keep their eyes on the prize: sales and low prices
                                                                              • Figure 28: Shop discounted items and buy whatever is the lowest price every time I shop, women 18-34 vs overall, September 2017
                                                                            • Encouraging sharing should bring benefits to all
                                                                              • Parents are active bargain hunters
                                                                                • Figure 29: Repertoire analysis of budgeting actions taken every time they shop, parents with children under-18 at home vs non-parents, September 2017
                                                                              • Parents need efficient ways to stretch their dollars
                                                                              • Retailers Shopped

                                                                                • Conventional grocery stores rank highest
                                                                                  • Figure 30: Retailers shopped, September 2017
                                                                                • Value offerings from conventional grocery stores cut in on value retailers
                                                                                  • Figure 31: Top three retailer-type shopped, by finance monitoring behaviour, September 2017
                                                                                  • Figure 32: Retailers shopped (any rank), September 2017
                                                                                • Private label products resonate with budget-minded shoppers
                                                                                  • Figure 33: President's Choice Loads Of Chicken with Cheese Tortellini (Canada, October 2017)
                                                                                  • Figure 34: President's Choice 3 Grains & Cranberry Salad (Canada, October 2017)
                                                                                  • Figure 35: President's Choice Tom Yum Broth (Canada, October 2017)
                                                                                  • Figure 36: PC Loads of Canadiana Burger, May 2017
                                                                                  • Figure 37: PC Maple Marshmallows, May 2017
                                                                                • Bargain hunters rate mass merchandisers as their go to retailer
                                                                                  • Figure 38: Shopping at mass merchandisers, September 2017
                                                                                • Value is in the eye of the beholder – time savings also count for parents
                                                                                • Canada vs US – Differences in Approach to Shopping

                                                                                  • Canadians approach to budget shopping differs from Americans
                                                                                    • American shoppers are more likely to put effort into doing pre-work
                                                                                      • Figure 39: Budgeting actions taken every time, Canada vs US, September 2017(Canada)/ August 2017 (US)
                                                                                    • But, Canadians are paying attention to prices at stores
                                                                                      • Figure 40: Budgeting actions taken every time, Canada vs US, September 2017(Canada)/ August 2017 (US)
                                                                                      • Figure 41: Budgeting actions taken at least some of the time, Canada vs US, September 2017(Canada)/ August 2017 (US)
                                                                                    • Canadians are less willing to give up their favourite brands or products
                                                                                      • Figure 42: Buying store brand every time, Canada vs US, September 2017(Canada)/ August 2017 (US)
                                                                                      • Figure 43: Agreement with ‘I will wait for a product to go on sale before I buy it’, Canada vs US, September 2017(Canada)/ August 2017 (US)
                                                                                  • Appendix – Data Sources and Abbreviations

                                                                                    • Data sources
                                                                                      • Consumer survey data
                                                                                        • Consumer qualitative research
                                                                                          • Abbreviations and terms
                                                                                            • Abbreviations

                                                                                            The Budget Shopper - Canada - December 2017

                                                                                            US $3,995.00 (Excl.Tax)