Canadian shoppers turn away from specialty apparel this holiday season, Deloitte finds

Specialty apparel retailers in Canada face the sharpest pullback of any store format this holiday season, as consumers shift their gift budgets towards Amazon, dollar stores and other value channels. According to Deloitte Canada's 2026 Holiday Retail Outlook, published on October 14, 2026, net shopping intent for specialty apparel stands at -9%, while Amazon gains +9% and dollar stores +7%.

The net figure measures the share of consumers planning to shop a format more this year minus those planning to shop it less. Mass merchants (+3%) and off-price stores (+2%) also gain ground, while Temu, Shein and Alibaba edge up +1%. Only 25% of Canadians say they are likely to buy holiday gifts at a specialty apparel store, against 74% for Amazon and 69% for mass merchants.

Budgets shrink as value takes priority

The Toronto-based consultancy expects average planned holiday spending to fall 14% to 1,305 Canadian dollars, the lowest level since the survey began. The non-gift category, which covers clothing bought for oneself or family alongside electronics and donations, drops 8% to 214 Canadian dollars. Gift spending holds up better, down 5% to 429 Canadian dollars, while experiences and holiday entertaining fall 20% and 22% respectively.

Value now drives retailer choice. Some 77% of consumers rank reasonable prices first, ahead of product quality at 68%, and 80% say they actively search or wait for the best price. Availability matters too: 74% would switch brands if their preferred item is out of stock.

"Canadians are not cancelling the holiday season, but economic uncertainty is influencing their spending decisions, making them far more discerning," said Shaunna Conway, partner and national retail leader at Deloitte Canada.

Limited room for a values premium

Sustainability and local sourcing carry weight, but within narrow price limits. While 65% would pay at least some premium for products that are certified sustainable, socially compliant or made in factories that support worker wellbeing, only 13% would pay more than 10% extra. Some 45% consider Canadian or local ownership important when choosing a retailer.

November and AI shape the journey

Shoppers expect to visit around 16 stores and digital destinations this year, up from 14 in 2025, with 55% of budgets planned in-store and 42% online. More than half of holiday budgets, 51%, are expected to be spent by the end of Black Friday and Cyber Monday.

AI is gaining ground as a discovery tool. Some 39% plan to use AI for holiday shopping, up from 25% last year, mainly for gift inspiration and price comparison, though only 19% would let AI complete a purchase for them.

The survey of more than 1,000 Canadian consumers was conducted between August 28 and September 4, 2026.