Like many people in these late-stage pandemic times, Nicole Malenczak is bored. The 33-year-old woman and her husband, who live in Edmonton with their two-year-old, are both still employed.
But they’re obviously not spending the way they used to. Gone are the vacations where they actually got to fly somewhere, the annual museum pass, visits to the zoo, and monthly trips to the movies.
Dinners out at restaurants also ended with the arrival of COVID-19 a year ago. Instead, they’re getting occasional takeout and buying things that bring some excitement to life at home.
“We’re buying … really anything to distract [us] from what’s going on in the real world,” said Ms. Malenczak. That includes more interesting food, more expensive wine, and new toys for her daughter, the latest a train set she loves. Ms. Malenczak recently bought a milk steamer to make lattes, and even though she rarely eats meat, she splurged on a chicken.
She calls these items “quarantreats,” and says they stem from a need to insert some novelty in an otherwise mundane existence. “This is the one thing I control.”
The pandemic has led to widespread job losses – 858,300 fewer positions than before the first wave of COVID-19, according to Statistics Canada – but those who remain employed are saving money like never before. Since the start of the pandemic Canadians have racked up more than $150-billion in “excess savings,” according to BMO Economics.
Michelle Rilli, 41, of Ancaster, Ont., has been spending more on organic foods and equipment for outdoor family activities. She got a kids’ learning box subscription (science, technology, engineering and math) for $22 a month and is now “buying really good coffee because we’re not going out …. For New Year’s, I ordered all the scallops. I didn’t care what it cost.”
She says it’s a shift from the early COVID-19 days, when her husband was laid off from his job as a mechanic. “For the first few months of the pandemic, I didn’t sit down. It was just stress, panic, anxiety and saving. Now I am finding more ways to relax.”
A look at Statscan’s retail trade sales data, which are seasonally adjusted and go to November, 2020, shows grocery sales have increased significantly, but so have several other categories that focus on products for the home.
Sales of alcohol are consistently above pre-pandemic levels. Cannabis sales in November were 71.8 per cent higher than in February, 2020, the result of a steady climb.
Stores that sell specialty foods and health and personal care items – a category that includes retailers of cosmetics, glasses, health supplements and pharmacies – are selling above pre-pandemic levels, and have been on an upward trend since late spring. The wide-ranging category of “sporting goods/hobbies/books/music” is also seeing sales above prepandemic levels, although those categories spiked in June and later in the fall.
A survey conducted in February by Toronto market researchers Dig Insights found a trend toward higher spending on groceries, coffee and tea compared with the early days of the pandemic.
While more than half of the 521 respondents, 61 per cent, said they weren’t buying things now that they wouldn’t have before the pandemic, those who were listed hand sanitizer, masks, fitness equipment, makeup, snacks, and entertainment items for the home when asked what they were buying.
Meanwhile, Canadians’ “excess savings” cited by BMO aren’t expected to last. In a report called Navigating 2021, published in December, Royal Bank of Canada predicts a continual decline in the household savings rate throughout the year. RBC predicts a savings rate of 10.7 per cent for the first quarter of 2021, and believes it will end the year at 4.3 per cent.
“Government support will gradually fade out as labour markets recover and spending will rebound … once restaurants and travel open up,” said RBC economist Claire Fan.
Kathryn Mandelcorn, director of cash flow strategies at Spring Financial Planning in Vancouver, said she’s noticed more of a reallocation of funds than an increase in spending among her employed clients. Families that no longer have kids’ activities are among those saving the most, she says.
“What can feel like an inability to plan ahead has brought out this different mindset,” Ms. Mandelcorn added. “People are saying, ‘What else have I got going?’ ... I think there is boredom coming into play.”
Since it’s difficult to know what life will be like in a few months, Ms. Mandelcorn recommends creating a short-term money plan, looking at four to six months ahead. She advises people to continue saving for things that seem unattainable now, like kids’ sports and travel, even if it means saving less than they might normally put away. “You will [travel] again. How great will it feel to have X dollars in that account?”
As for those making out-of-character purchases on Amazon or sudden splurges on a new hobby? She says not to sweat it – if it’s within your means.
“When you have clarity about how you use your money, it gives you permission to spend without guilt. ... When people start to go into debt, it’s an issue.”
Whitehorse resident Amy Kenny, 39, is on a break from online shopping after a period she describes as “spending as a coping mechanism.” Her purchases included a stand mixer, a laptop, fitness gear and a $100 yoga onesie – which she justified because she is a personal trainer.
“I was so … grossed out by myself,” she said, noting she’s normally not a big shopper or spender. “It was like every time something new showed up in the mail, I got online to buy something else.”