Consumer Spending: Is It Contradictory

Consumer spending can go up and down that it seems contradictory. Check out these headlines close to one another:

  • Consumer spending rises across Canada but dips in Alberta
  • Canadian retail stocks feel consumer-spending pinch
  • Canadian consumers to cut spending

What is underlying this are the categories in consumer spending. Retail stocks might feel the pinch, in this case in the Winter, because people are heating their homes and staying in. Retail spending falls under ‘Discretionary Consumer Spending’. Heat and groceries are ‘Essential Consumer Spending’. When people own homes, the consumer spending will rise on ‘Essential’ things, like heat and school, while falling on ‘Discretionary’ things like fancy clothes.

Source: Marketing Charts