Jan 10, 2026
Canadians appeared to loosen their purse strings this holiday season, despite widespread expectations that budgets would be tighter.
New data from Visa shows holiday retail spending in Canada rose 4.4% year over year, pointing to resilient consumer activity even as cost-of-living pressures remain elevated.
Advertisement
And that’s despite recent consumer surveys suggesting that many Canadians were preparing to rein in holiday expenses. For example, a Rakuten Canada survey (1) found nearly half of Canadians planned to spend less this holiday season than last year, citing rising prices and economic uncertainty.
What the Visa data says about how Canadians spent
Visa’s holiday analysis, which tracks retail sales over a seven-week period beginning November 1, suggests shoppers remained active, but increasingly deliberate.
In-store shopping continued to dominate, accounting for 88% of holiday payment volume, while online spending rose 7% year over year, supported by extended promotions and the convenience of e-commerce.
Certain categories stood out. Clothing and accessories were the fastest-growing segment, posting a 10% increase, nearly double last year’s pace. General merchandise stores saw a 9% lift, as consumers gravitated toward one-stop shopping, while health and personal care spending rose 5.4%.
Visa chief economist Wayne Best framed the season as a shift in how Canadians approach discretionary purchases. “This season also marked a turning point, with artificial intelligence shaping how people discover products, compare prices, and interact with offers,” he said in a statement. “This led to a more informed, more intentional consumer, ensuring they could stretch their discretionary spending.”
Must Read
- Stop the leak: 5 costs Canadians (still) overpay for every single month. How many are sabotaging your 2026 budget?
- What's your worth? Here are the 3 net worth milestones that change everything for Canadians (and what they say about you)
- Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich — and that ‘anyone’ can do it
Why spending rose even as Canadians tried to be cautious
The contrast between Visa’s spending data and Rakuten’s survey results suggests many households entered the holidays with restraint in mind, but still opened their wallets when faced with familiar seasonal pressures.
Rakuten’s findings showed 48% of Canadians planned to spend less than last year, and a large majority said they were actively looking for ways to cut costs, such as waiting for sales, stacking discounts or reducing gift lists.
Yet Visa’s data indicates that while Canadians may have hunted harder for value, they didn’t step away from spending altogether. Instead, they appear to have shifted how and where they spent, favouring promotions, convenience and categories tied to personal use rather than big-ticket indulgences.
Advertisement
For consumers, that behaviour reflects a balancing act that requires careful management of ever-tightening budgets, without giving up altogether on holiday spending habits.
What this means for household finances heading into January
The concern for many households is not December spending itself, but what will follow.
Holiday purchases often coincide with higher winter utility bills, and lingering inflation in essentials such as groceries can continue to strain cash flow early in the new year.
Recent warnings from credit counsellors suggest some Canadians are already feeling stretched, with more people seeking guidance before January bills arrive. Against that backdrop, the holiday spending bump captured by Visa may translate into tighter budgets and tougher trade-offs in the weeks ahead.
Above all, Canadians appear to be spending more carefully, not freely, using tools, technology, and promotions to stretch dollars rather than abandoning discretionary purchases altogether.
As 2026 approaches, that pattern may persist: cautious optimism at the checkout, paired with ongoing pressure behind the scenes.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Global Newswire (1)
You May Also Like
- Here’s how to retire in 10 short years no matter where you live in Canada — even if you’re starting with $0 savings
- If you’re still feeling the pinch this month — don’t panic. Here are 5 easy ways to fix your finances without a total overhaul
- How Warren Buffett’s simple buy-and-hold real estate approach offers a lesson for Canadian homeowners and long-term investors
- Approaching retirement with no savings? Don’t panic, you're not alone. Here are easy ways you can catch up (and fast)
Steven Brennan is a freelance finance writer based in Vancouver, BC. He holds a BA and an MA from Maynooth University, Ireland. His work regularly appears at Canadian Mortgage Trends, Lowest Rates, Loans Canada and other Canadian and US brands, while also working as a ghostwriter for financial influencers.
