Black Friday splurges may leave many Canadians in the red come the new year.
Driving the news: Canadians spent 6% more on Black Friday shopping than last year, according to data shared with The Peak by Salesforce. That’s despite discounts remaining virtually unchanged (an average of 28%, up one percentage point from last year).
Yes, but: Just because people bought more doesn’t necessarily mean they could afford to buy more (and who among us hasn’t been there?). The share of Canadians using Buy Now, Pay Later (BNPL) plans to finance their Black Friday purchases nearly doubled from last year to 5.1%.
That’s still a small slice of overall buying, but the large jump suggests many people’s budgets are stretched.
Why it matters: BNPL is presented at checkout as an easy way to space out payments, which feels nice at the time, but research by the Stanford Graduate School of Business shows that BNPL users often end up getting dinged down the road with hundreds of dollars of late penalties and overdraft fees.
Our take: Almost two-thirds of Canadians say the rising cost of living is one of their top three issues right now, and that feeling is borne out in this data. If you’re price-sensitive, waiting for Black Friday deals to make large purchases is a reasonable way to make your dollar go further. But the rise in BNPL usage points to a growing number of people who can’t really afford to make those purchases, even with a discount.