Canadian Tire Corp. mentioned it. So did Tim Hortons parent company Restaurant Brands International. Ditto Roots Corp. and Alimentation Couche-Tard Inc.
Across the latest set of quarterly earnings calls, nearly every major company spanning Canada's retail landscape said they've noticed shoppers increasingly looking for cost savings and thinking twice about some purchases.
Many say a mix of inflation and higher interest and mortgage rates are to blame, as they rankled budgets for much of last year and have slowed consumer spending well into this year.
But many agree the back half of 2024 could see some of those concerns ease, especially if the Bank of Canada begins cutting its key lending rate over the summer.
"The interest rate is going to impact how much disposable income that a customer is spending on things like fashion, apparel, footwear and even experiences and activities," said Liza Amlani, principal and founder at Retail Strategy Group, a consulting firm.
She's seen consumers spend the bulk of the year so far seeking deals and said no income bracket has shied away from turning to value chains to stretch their dollar even further.
"That aspirational and luxury customer is also shopping at Walmart," she said.
Amlani, however, sees signs that consumer spending is headed for a rebound.
Travel spending is picking up and her retailer clients have seen "a big lift" in sales of trendy items versus basics, which tends to be a sign that discretionary purchasing is bouncing back.
The rebound Amlani sees taking shape was reflected in a recent survey of 300 Canadians that financial services firm Stifel completed. The survey showed slightly more respondents in April than in January felt their spending would increase over the next 12 months.
In fact, of the six categories Stifel tracked, spending intentions were higher in four — apparel, mattresses, toys and dollar stores.
Martin Landry, Stifel's managing director of equity research who follows several Canadian retailers, wasn't surprised to see the clothing industry poised for "significant" improvement.
"Apparel is something people like to treat themselves to and it's something that has been a little more recession resistant than maybe food," he reasoned.
Food sales have taken a hit, in part because weather weighs heavily on spending patterns, said Dax Dasilva, chief executive of payments technology company Lightspeed Commerce Inc. No one wants to sip cocktails on a patio when it's raining or venture out for ice cream in the cold.
It is also a category where it is easier to trade down to value items at the grocery store because private labels abound, and when eating out, consumers can pick quick-serve or fast-casual restaurants rather than fine dining establishments or settle for a home-cooked meal.
"When people do go out to eat, they view it as a luxury," Dasilva said.
"They are skipping on items that may be lower priority for them, for example, tapas, appetizers or tasting menus."
While customers these days are willing to spend on lower cost but more indulgent menu items like pizza, coffee and dessert, they're cutting back on higher ticket items like alcohol, he said.
How fast consumers will get comfortable spending in such categories again is largely based on their income, said Landry.
Stifel's survey on discretionary spending shows those in a higher income demographic, which the firm characterizes as people making $75,000 a year or more, reported a greater likelihood that they would increase spending sooner than those with lower incomes.
In fact, Stifel said spending intentions for those earning less than $75,000 annually were weakening in the lead up to April.
"What this tells us is that probably companies that are exposed to more of a higher-income consumer are going to fare better than the ones that are targeting the middle class," he said.
No matter what income bracket a retailer is courting, Landry said they have their work cut out for them.
All stores, he said, have to closely consider how entrenched some consumers' habits for coping with inflation have become.
"It's a question that every single retailer asks themselves: Did we train the consumer to buy only (during) promotions?" Landry said.
This report by The Canadian Press was first published May 31, 2024.
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