Business Daily (BBC World Service)

Episode: How Christmas spending is changing

Host: Megan Lawton
Date: December 22, 2025

Overview

This episode explores how Christmas spending habits are shifting in Canada, the US, and beyond during an era of economic uncertainty, rising inflation, and new technology. Reporter Megan Lawton visits the festive Winter Village market in Toronto’s Distillery District to interview shoppers, shopkeepers, retail experts, and marketers. The discussion examines not only how much people are spending—but also how people are prioritizing value, meaningfulness, sustainability, and experience. The episode also digs into the growing influence of artificial intelligence and “de-influencing” on holiday shopping choices, with particular attention to the behaviors of younger generations.

Key Discussion Points and Insights

1. A Season of Caution: The Impact of Economic Uncertainty (01:01–05:23)

• Shoppers across North America are feeling budget pressure.
  Many are grappling with higher living costs, mortgage payments, and economic uncertainty.
  • “A lot of people are kind of like trying to make mortgage payments, but then also trying to like, spend and keep the tradition going. So it's kind of hard to manage both.” (Megan Lawton, 01:41)
• Canadian and US consumers plan to cut back.
  Citing PwC surveys, Canadians expect to spend 10% less than last year; Americans plan to spend 5% less versus 2024.
  • “A recent survey from accounting firm PwC suggests 80% of Canadians plan to cut back this year. While they won't reduce spending on family, they will spend less on friends and themselves.” (Megan Lawton, 03:17)
• People are focusing on value and meaningfulness.
  • “I think gifts that are meaningful...because a lot of us buy gifts and the person doesn't use it afterwards...So things are more meaningful this year. Experiences. More experiences.” (Monique, shopper, 03:31)
  • Trend: Shopping at thrift stores, giving experiences over objects, and prioritizing children and close family.
• Inflation is widely felt—especially on essentials and even “little things”.
  • “Even the prices for food has gone up a lot over here and all the little stuff, even, that's where you notice it the most.” (Mike, shopper, 05:14)

2. Retailer Responses & Changing Types of Gifts (05:23–07:00)

• Retailers notice a shift towards practical, smaller gifts.
  • Nelmar, owner of Toronto Pen Shop: “Customers are buying smaller items, but more of them. So higher units in terms of their baskets but smaller items. That's what we're seeing.” (Nelmar, 06:09)
  • Practical, reusable gifts (pens, notepads) are popular; customers are avoiding flashy or one-time-use items.

3. Broader Economic Forces and Generational Challenges (07:12–12:27)

• Trade tensions and rates are adding pressure.
  • Ongoing US-Canada tariffs and trade war are making basics like food, apparel, and automobiles more expensive.
  • “There's just, I think, an air of uncertainty that is giving people reason to really think about their spending this holiday season.” (Doug Stephens, 08:48)
• Debt, job security, and wealth concentration shape consumer confidence.
  • Record high credit card debt and growing income polarization most strongly affect younger people.
• A generational divide: Millennials & Gen Z delay milestones.
  • “We are seeing a generation now that is forestalling relationships, forestalling having children, buying homes, living at home much, much longer than before... The average age of a home buyer now, first time home buyer in Canada, is 40 years old.” (Doug Stephens, 11:07)
  • Retailers must adapt as younger generations are cut out of the traditional economic equation: “The fundamental nature of capitalism may be strained now to the point where we are literally cutting new generations out of the economic equation.” (Doug Stephens, 12:22)

4. Shifts in Spending: Experiences over Things (09:20–10:37)

• Experiences are prioritized over commodities.
  • “The trend that we have seen over the last couple of decades is that consumers are more inclined to spend on experiences than products. ...what consumers, generally speaking, are looking for are fewer commodity products and more things that represent tangible experiences in their lives.” (Doug Stephens, 09:20)
  • Examples: live entertainment, dining out, vacations, holidays.
  • Younger generations echo this on the ground: “Vacations. I think that's probably one of my biggest things going in 2026. A vacation is good for mental health…I'm bonding with them.” (Shopper at Toronto market, 10:00)

5. The Rise of AI and New Shopping Habits (14:25–16:39)

• AI is changing the way people search for—and buy—gifts.
  • Hiten Patel (SEO Account Director, Push): “The future is changing quite quickly.” (14:25)
• AI-generated search results, recommendations, and efficiency.
  • “When you search for something that is query based, question orientated, essentially you can see that AI overviews takes the top spot.” (Hiten Patel, 14:44)
  • Gen Z in particular are using AI for shopping inspiration and deal-finding: “A survey from accounting Firm Deloitte suggests 43% of Gen Zs in America ... will use AI for gift buying and inspiration.” (Megan Lawton, 15:39)
  • “What AI does is it goes away, researches and sees what people are talking about in terms of the products you're looking to buy... But not only that, they're also able to find the best prices online.” (Hiten Patel, 15:58)

6. De-influencing, Sustainability, and Mindful Consumption (16:39–19:05)

• De-influencing on social media pushes consumers to buy fewer, more intentional items.
  • “Welcome back to my De Influencing series where I encourage you to buy less things for the sake of the planet.” (16:39)
  • “Let me ask you something, did you want this before you knew it existed?” (Diana Webe, De-influencer, 17:10)
• Despite “de-influencing”, classic influencers still sway gift buying—especially among Gen Z.
  • “Data From Deloitte suggests 3/4 of gen Zs are turning to influencers to help buy their Christmas presents. This trend is more demonstrative of a mindful approach to spending.” (Megan Lawton, 17:56)
  • Emphasis on homemade or creative gifts, such as crocheted items, is growing in popularity.

7. Personal Stories: Global Perspectives on Festive Spending (19:05–19:54)

• International listener stories reflect similar themes:
  • Jamie from the Philippines: “My main spending priorities during festivals or the holidays is food. I like to keep myself well fed first before I think of anything else to get.”
  • Florence from New York: “Since I don't have that many people to buy for, I can spend a little bit more money on each one.”
  • Both prioritize practicality, food, and close relationships in their holiday spending.

Notable Quotes & Memorable Moments

• “I think gifts that are meaningful...Experiences. More experiences.”
  — Monique, Toronto market shopper (03:31)

• “Even the prices for food has gone up a lot over here and all the little stuff, that's where you notice it the most.”
  — Mike, Toronto market shopper (05:14)

• “The trend that we have seen over the last couple of decades is that consumers are more inclined to spend on experiences than products.”
  — Doug Stephens, Retail Profit (09:20)

• “We are literally cutting new generations out of the economic equation.”
  — Doug Stephens (12:22)

• “What AI does is it goes away, researches and sees what people are talking about in terms of the products you’re looking to buy. …They’re also able to find the best prices online.”
  — Hiten Patel, Push (15:58)

• “Welcome back to my De Influencing series where I encourage you to buy less things for the sake of the planet.”
  — Social media de-influencer featured (16:39)

• “Let me ask you something: did you want this before you knew it existed?”
  — Diana Webe, de-influencer (17:10)

Timestamps for Key Segments

• 01:01 — Live from Toronto's Christmas market: introduction to shifting spending habits
• 03:17 — Canadian shoppers discuss value-driven, meaningful gifts and thrift shopping
• 05:44 — Local shopkeeper on changes in gift purchases (practicality & reusability)
• 07:12 — Doug Stephens introduces broader economic challenges, surveys, and tariffs
• 09:20 — Shift to experiences over products
• 10:37 — Insights on generational impacts & retail adaptation
• 14:25 — Hiten Patel on AI changing shopping behaviors
• 16:39 — Rise of de-influencing and sustainability trends on social media
• 19:05 — Global listener stories on holiday spending priorities

Conclusion

This episode highlights a clear trend: in 2025, holiday spending is defined by caution, consciousness, and creativity. People are spending less, seeking greater value, emphasizing experience and practicality, and turning to technology like AI to maximize budgets. Generational divides and economic uncertainty are changing traditions, while online movements encourage both intentionality and sustainability. The Christmas spirit persists—but what people buy, and how they decide, is rapidly evolving.