Canadians Cutting Back on Spending, Travel
The latest RBC consumer outlook suggests that Canadians are keeping a tighter rein on their cash this summer as they deal with ever higher food and gasoline prices.
According to the Canadian Press, RBC polled more than 4,000 people across Canada to get a sense of how they are coping with the greater strain on their finances at the pumps and the grocery store.
According to the bank, Canadians are principally doing three things to keep a lid on their spending:
• 55% of respondents said they are doing more comparison shopping for their food.
• 48% said they are following a budget more and making fewer impulse purchases.
• 29% said they are using their vehicles less, choosing to take public transit or walk more often.
This week, Bank of Canada Governor Mark Carney warned that food is likely to remain relatively expensive, and get even more so, in the coming months.
The poll’s findings, said RBC vice president Richard Goydner, prove Canadians are heeding that message.
“Canadians are very wisely responding to increases in prices by being more careful on how they spend that money,” Goydner told CTV News.
Gas prices also remain a frustration for Canadian motorists, with the price at the pumps jumping by 29.5% in the month of May alone. Food prices climbed 4.2% during the same month.
The RBC survey also found that about one-third of Canadians are holding back on selected big purchases at the moment, including vacations and new vehicles, including RVs.
Thirty-one percent of those surveyed said they were hanging onto their existing vehicle longer than they had anticipated, while delaying purchase of a replacement.
And 30% of respondents said they planned to put off their vacation plans until next year.
Joanne MacDonald told CTV News that her family is planning on going deep-sea fishing rather than a more lavish holiday this summer.
“We normally travel, go cross-country and things like that,” MacDonald said. “But we’re going to stay around, stay around home.”
The only exception to the belt-tightening is in oil-rich Alberta, where local car dealerships are still doing brisk business.
“We’re busy,” said Martin Speiran, a sales advisor at South Centre Porsche in Calgary. “The problem is product. Porsche Germany cannot just give us enough cars.”
Despite the overall belt-tightening, the optimism in Alberta does appear to be spilling over into other provinces. Nearly four in 10 people believed their personal financial situation would improve next year, while slightly more (42%) predicted improvement in the national economy during the same time period.
Canadians also told RBC that they estimated they are carrying an average $13,058 in personal debt, with only 30% of respondents saying they felt confident they were managing their debts well.
The RBC consumer outlook surveyed 4,008 people between June 9 and June 14, 2011. The results are considered accurate to within 1.65 percentage points, 19 times out of 20.