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Canadians to Spend on Their Homes and Hitting the Road in 2006

2006 MasterCard Purchasing Outlook finds cautious consumers still planning to spend in key categories; “selective consumerism” takes over

Toronto, February 27, 2006 – Most Canadian consumers are planning to be cautious and rational in their major purchasing in 2006. Yet, according to the 2006 MasterCard Purchasing Outlook, they still plan to selectively spend money on today’s priorities: trips, technology, and a trendy home. MasterCard Canada commissioned a survey of Canadian adults about their spending intentions in 2006.

“Canadians are hitting the spending brakes in an attempt to slow down their overall consumption, yet at the same time, they’re still intending to make some key purchases, particularly on their homes and on personal travel,” said Craig Penney, Vice President, Planning, MasterCard Canada. “It’s an attitude of selective consumerism that’s taking over — Canadians are willing to make purchases that will improve their lifestyle while managing overall spending carefully.”

Some highlights of the 2006 MasterCard Purchasing Outlook:

  • A third (33%) of Canadians said their spending intentions for 2006 were best described as cautious, and they plan to make decisions month to month. Another 30 per cent expect to spend the same amount as last year. Fifteen per cent intend to spend to improve their lifestyle, 12 per cent will scale back their spending, and nine per cent intend to splurge.
  • MasterCard expects consumer spending on travel and entertainment to increase in 2006. Sixty-five percent of respondents expect to do some personal travel in 2006 and more than half of those people (52%) expect to spend more on travel than they did in 2005.
  • Home décor and furnishings, major home appliances and entertainment equipment are among the most popular planned purchases for the year.
  • Most major purchases such as appliances and home electronics are planned for late spring and summer.
  • Three in four (76%) homeowners are planning to redecorate, renovate or repair their home.

The Mindset: Stable, Cautious, Investment-Oriented
The survey found most consumers are in a hold steady pattern, with spending more likely to be oriented to going out (34%), investing in their home (28%), and travel (16%). In addition, MasterCard asked Canadians to select a description that most closely characterized their spending intentions for 2006:

  • Cautious and Careful — The most frequent response, selected by one third of respondents (33%): “I am not sure how my year is going to go so I am going to be careful about any new spending and make decisions month to month.” Those with less than $40,000 in household income were the most likely (48%) to describe themselves as cautious spenders.
  • Status quo — 30 per cent selected: “I expect my spending this year to be about the same as last year.” Forty per cent of those aged 55 and over were in this category.
  • Improvement — 15 per cent of respondents’ spending was oriented to: “I am planning to spend on improvements to my life and home such as a home renovation or redecoration.” The improvement orientation is particularly strong in Manitoba and Saskatchewan (24%) and B.C. (22%).
  • Scaling back — 12 per cent of respondents described themselves as: “I will be spending less this year (than last year).” Atlantic Canada had the largest percentage (24%) of respondents who said this. Interestingly, those in the middle to high income brackets of $40,000 to $60,000 (20%) and $80,000 to $100,000 (17%) were most likely to report they were scaling back.
  • Indulgent — just nine per cent said: “I intend to spend more on myself and my family and friends, including some special treats.” Individuals in households with annual incomes of $80,000 to $100,000 were most likely (14%) to feel indulgent.

“ Across the board, Canadians are monitoring their spending closely,” said Penney. “Higher income doesn’t equate to more confidence or free-spending.”

Planned Major Purchases
MasterCard explored major purchase intentions and found that home-related items, such as furniture and electronics are the most popular.

“ It’s a remote control world. Home entertainment systems are increasingly considered staple goods and not luxury items,” said Penney.

Among the findings:

  • Twenty four per cent of consumers expect to purchase major furniture with June and July being the most likely months to purchase.
  • Eighteen per cent expect to buy a TV, DVD player and/or home entertainment system. Most likely months are April, June or July.
  • Seventeen per cent expect to buy a home computer and/or video gaming system, with June, July and September the most popular months.
  • Fifteen per cent of all consumers expect to make a major garden purchase; April, May and June are the most likely months.
  • Fifteen per cent expect to purchase a vehicle. May, June and August were the most frequently cited timing.

Purchase Category Expectations
Based on consumer expectations of spending, MasterCard expects the following categories will see stable or growing sales in 2006:

  • Clothing, shoes and accessories: 85 per cent of consumers expect to spend the same or more than in 2005 (58% say the same, 27% say more).
  • Personal care products and services: 88 per cent expect to spend the same or more (74% the same, 14% more).
  • Entertainment: 81 per cent intend to spend the same or more (56% the same, 25% more).
  • Home décor and furnishings: 60 per cent intend to spend the same or more (32% the same, 28% more). This product category received the largest expectation of increased spending among general consumers.

Based on consumer responses, the following categories may see flat or lower spending in 2006:

  • Home electronics: 77 per cent intend to spend the same or less (32% say the same, 45% say less).
  • Personal electronics: 79 per cent expect to spend the same or less (37% the same, 42% less).
  • Sporting goods: 79 per cent expect to spend the same or less (45% the same, 34% less).
  • Toys, crafts and hobbies: 75 per cent expect to spend the same or less (47% the same, 28% less).

“ Many Canadians are expecting to spend less on home and personal electronics in 2006, however this may be a reflection of how much they already spend in these areas,” commented Penney. “Certain products, such as iPods and home gaming systems, were in big demand last year, particularly during the holiday season. Consumers may be considering taking a break in this category. That being said, a powerful product introduction could change their outlook.”

Homeowners’ Plans
MasterCard also looked specifically at the purchase plans of owners of homes and condominiums:

  • Almost half (46%) plan some kind of redecorating project like repainting.
  • Thirty per cent (30%) are planning major renovations or repairs.
  • One in four (25%) plan to landscape.
  • Ten per cent (10%) are planning to purchase a new appliance.

“ Canadian homeowners are bullish about investing in their home,” said Penney. “It’s an indication of confidence in their home as a primary long term investment and the benefits of enhancing it. For many Canadians, the enjoyment of improving their home is priceless — more than one in four Canadians say the most enjoyable spending they do is on their home.”

Hitting the Road
Two thirds (65%) of the survey respondents expect to do some personal travel this year. Half (52%) of those consumers expect to spend more than last year, and almost four in 10 (38%) expect to spend the same amount. The most popular travel destinations are within Canada (40%), the United States (30%), and Europe (30%). Sixteen per cent will keep their personal travel within their home province.

This wanderlust will drive a number of sales categories. Those planning personal travel expect to do the following travel-related purchasing:

  • Airline tickets (69%).
  • Hotel or motel room rental (62%).
  • Car rental (31%).
  • Campground or RV site rental (23%).
  • Organized tour (18%).
  • Train tickets (13%); bus tickets (12%).
  • Cruise (12%).

About the survey
This national survey of 1,000 Canadians 18 years of age and over was carried out by telephone between January 19 and 22, 2006 by Decima Research on behalf of MasterCard Canada. Results are considered accurate to within plus or minus 3.1 per cent, 19 times out of 20.

About MasterCard International
MasterCard International is a leading global payments solutions company that provides a broad variety of innovative services in support of our global members’ credit, deposit access, electronic cash, business-to-business and related payment programs. MasterCard manages a family of well-known, widely accepted payment card brands including MasterCard®, Maestro® and Cirrus® and serves financial institutions, consumers and businesses in over 210 countries and territories. The MasterCard award-winning Priceless® advertising campaign is now seen in 105 countries and in 48 languages, giving the MasterCard brand a truly global reach and scope. For more information go to