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Holiday shopping expected to shift online even more, stoking concerns about delivery capacity

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Between American Thanksgiving on Nov. 26 and Christmas, the United States delivery system may be over capacity by as many as seven million packages per day, the Journal reported on Monday, citing estimates from ShipMatrix Inc., a software company that focuses on shipping data.

In Canada, Purolator Inc. is hiring 1,600 new staff and adding 10 per cent more delivery vehicles in order to meet demand during the 2020 “super peak” season, chief executive John Ferguson announced on Monday.

FedEx Canada is also expanding capacity in advance of what it believes will be record e-commerce sales, spokesperson James Anderson said in an email. But he still suggested consumers “shop and ship early to avoid delays during this unprecedented surge.”

Bricks-and-mortar stores will have to compete for customers increasingly spending their budgets online. Photo by Brent Lewin/Bloomberg

Deloitte’s holiday forecast surveyed 1,000 Canadian consumers in September and found that the average shopper will spend roughly 44 per cent of their holiday budget online, up eight percentage points from last year. In addition, shoppers will only visit an average of 4.6 bricks-and-mortar stores, down from 6.4 stores last year.

“The good news is, retailers and Canada Post and all the courier companies have had months to get ready for this,” said Marty Weintraub, who leads the national retail consulting practice at Deloitte Canada. “Are they going to be fully ready? Probably not. Are they going to be caught flat footed? I hope not and expect not.”

Roughly a third of respondents in the Deloitte survey said they plan to spend less than last year, with the average holiday budget expected to drop 18 per cent to $1,405 from $1,706 in 2019. The average budget for gifts dropped to $447 from $485 last year. Slightly more than half of the respondents planned on buying presents for five or fewer people.

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