As discussed in last week’s holiday update, Q4 started off strong in Canada. October retail sales increased by 6% vs. 2020 and 11% vs. 2019. In fact, our data shows a third of Canadians said they had either started or finished their holiday shopping in October. While the overall growth in October was impressive, it may suggest the remainder of Q4 will be challenged. Nowhere is this more apparent than when it comes to Black Friday.

One of the major factors that has impacted Black Friday is timing. In Canada, Black Friday promotions started as early as the end of October 2021. Gone are the days when Black Friday was a one-day shopping experience synonymous with substantial discounting. Over the years the deals have softened, and Black Friday itself has lost some of its luster.

Preliminary data from our Retail Early Indicator shows total retail sales in Canada, excluding apparel and footwear, declined 6% for the week ending November 27, 2021. Industries such as small appliances, technology, toys, and housewares experienced declining sales for the week of Black Friday. Many of these industries also declined compared to 2019 as consumers shifted purchases to earlier in the holiday season.

Sales of televisions, which have historically performed well during Black Friday and were a very popular purchase over the last two years, declined by 37% compared to 2020. The toy industry also appeared to lose some of its luster: Weekly Black Friday sales were down sharply vs. 2020. This decline could be attributed to the fact that many top-selling toy items are harder to find this year. As many Black Friday shoppers learned, finding these top items may mean making multiple visits to different retailers or substituting with a different gift altogether.

For industries such as apparel, footwear, and beauty, the story is much more encouraging. Consumers are beginning to return to these underperforming parts of the market as they begin a slow return to work, school, socializing, and entertaining. One example of this is the beauty industry, where growth has been driven by skincare and fragrance. This year sales increased by 66% over 2020 and 68% over 2019 for the week ending November 20, 2021. For the week ending November 27, 2021, sales increased by 43% over 2020 and 26% over 2019.

When it comes to demographics, Black Friday continued to attract the Gen Z consumer this year ― stores and major urban malls were dominated by crowds of younger consumers eager to engage in a form of “shoptainment.”  In October, when two-thirds of apparel sales were driven by brick-and-mortar locations, Gen Z consumers were responsible for one-third of the growth. Not all consumers are eager to return to brick-and-mortar, especially at a time when COVID-19 appears to be rearing its ugly head once again. Our research from October shows 45% of Canadians said their shopping habits would be strongly impacted by the arrival of a new COVID-19 variant. Unfortunately, as cases in many parts of Canada continue to surge and our understanding of the newly identified omicron variant deepens, consumers are treading very lightly when it comes to embracing old holiday habits. While some of the trends mentioned above suggest we are moving slowly toward recovery, it appears Holiday 2021 will be far from “normal” after all.