How Canadian consumers are adapting in an uncertain economy: NielsenIQ

Despite ongoing economic uncertainty, Canadian consumers are demonstrating remarkable resilience. NielsenIQ’s Consumer Outlook: Guide to 2026 reveals that while financial pressures persist—rising debt-to-income ratios, increasing unemployment and inflation fatigue—many Canadians are adapting their behaviours rather than pulling back.

In September 2025, consumer confidence rose slightly to 60.3 points, while 36% of Canadians reported feeling financially worse off. Rather than halting spending altogether, consumers are recalibrating how and where they spend. This shift is not just about survival—it’s about strategic adaptation.

Rising food prices fuel inflation fatigue

Food inflation remains a top concern for Canadians. In September, the cost of essentials such as meat (+6.8%), baby care (+6.3%) and dry grocery items (+4.5%) continued to climb, outpacing overall CPI. Producer price data shows dramatic increases in commodities such as coffee (+33.2%), cocoa (+22.9%) and finfish (+33.2%), signalling that elevated prices may persist into 2026.

Inflation fatigue is reshaping consumer habits. Nearly half of Canadians (49%) now stock up when items go on sale, and 42% report only having money for essentials. Shoppers are increasingly planning purchases to avoid impulse buys, with 41% actively managing their baskets to control spending.

Buy Canadian sentiment slows as value takes priority

While patriotic purchasing surged in recent months, the “Buy Canadian” movement is moderating. In mid-2025, 14% of Canadians identified as “Canadian loyalists,” committed to only buying Canadian-made products. However, this figure is down three points, suggesting a shift in priorities. Thirty per cent of Canadians report avoiding U.S. brands, but this sentiment has dropped by seven points as more consumers shop for the brand that meets their needs.

While many still prefer Canadian-made goods, they’re increasingly willing to choose U.S. or international products if they offer better value. This shift is evident in performance data: while “Made in Canada” and “Product of Canada” items continue to outperform “Made in U.S.A.” products, the gap is narrowing as price sensitivity grows.

Retailers are responding by expanding assortments that balance national origin with affordability. Promotions, private-label offerings and discount formats are gaining traction, reflecting a consumer base that is loyal to value above all else.

Smaller brands outperform as retailers rethink assortment

One of the most striking trends in the fast-moving consumer goods (FMCG) landscape is the rise of smaller brands. These nimble players are fuelling growth across categories, contributing to 38% of absolute dollar gains. In contrast, larger brands are struggling to maintain momentum in a market where differentiation and agility matter more than legacy.

Retailers are adapting by curating assortments that go beyond price. Smaller brands often bring innovation, niche appeal and authenticity—qualities that resonate with today’s value-conscious but experience-driven shopper. Whether it’s unique flavours, sustainable sourcing or local production, these brands offer something distinct. This shift also reflects a broader evolution in strategy. Assortment is no longer just about breadth—it’s about relevance.

Value of time drives online shopping growth

Another key dimension of value is time. More Canadians are turning to online channels to optimize their lives. Online now accounts for more than 10% of FMCG spend, with penetration reaching 68%—a five-point increase in just two years.

Middle-aged, higher-income households with children are leading this shift. These consumers are not just buying online; they’re integrating digital shopping into their routines. From bulk purchases to subscription models, online platforms offer time-saving solutions that align with busy lifestyles.

Forecasts suggest this trend will accelerate, with online share expected to hit 15% by 2030. Retailers are investing accordingly, enhancing digital experiences and expanding fulfilment options to meet growing demand. CG