Holiday spending to increase and move online

Canadians plan to spend more on gifts this holiday season and an increasing number of those purchases will happen online, a couple of surveys suggested Tuesday.

The Royal Bank of Canada said respondents to an online poll commissioned by the bank plan to spend $640 on gifts for others this holiday season. That's up from $624 last year.

Statistics Canada data revealed Tuesday that the holiday shopping bonanza may already have begun, asretail sales increased by 1 per cent in September, the largest increase since November 2010.

In addition to gifts, Canadians say they plan on spending $100 more ($612 compared to $512) on holiday entertainment, decorations and travel expenses this year compared to last.

Online sales

A separate report from online auction site eBayCanada Inc. on Tuesdaysuggests a lot of that spending is going to move online. Based on an analysis of sales activity, the company expects Sunday, Nov. 27 to be the busiest online shopping day of the year.

More than a half-millionCanadians are expected to shop on eBay that day, buyingan aggregate oftwo gifts every second for friends and family. That's a 17 per cent rise over last year's sales activity.

Research commissioned by the company suggests that 40 per cent of Canadian shoppers are expected to do some or all of their holiday shopping online this year, an increase of approximately 11 per cent over 2010.

Because of the nature of the technology, much of those online sales will be paid for with credit cards. But budget-minded consumerspolled in RBC's survey say they plan oneschewing plastic in favour of cash in bricks and mortar retailers.

Fifty-five per cent of consumers in RBC's poll say they plan on using cash to finance their holiday buying. That compares to 37 per cent who will use credit cards, and 27 per cent who plan on using debt cards.

"It can be easy to get carried away with the holiday spirit when you're out shopping," RBC's product manager Maria Contreras said. "Having a budget in mind before you start checking off your holiday gift list will help ensure you're only spending what you know you can afford."

"A little planning ahead can help you stay within your spending limits for the holidays," she said.

EBay's data was drawn from an online sample of 1507 Canadians from November 7 to9. Royal Bank's data was culled from an online survey of 3,054 Canadiansfrom September 26 to October 3.