Gas prices a Christmas boon?

Savings at the pump may allow many Canadians to shell out more for gifts this holiday season and boost sales for retailers, analysts say, particularly as a weaker loonie prompts fewer shoppers to venture south of the border.

Oil prices have fallen well over 40 per cent since the summer, leading to a major sell-off of energy stocks, but it has also translated into savings for motorists filling their tanks.

And that's likely to spur lower- to middle-income Canadians to splurge more on Christmas gifts said Mark Satov, president and founder of Satov Consulting.

Weakness in the loonie also means fewer Canadians will go across the border to do their holiday shopping, Satov added.

"When you do a price parity comparison and you go and see what that jacket is selling for in Buffalo, it's getting more and more expensive as the Canadian dollar drops," he said.

While all Canadian retailers are likely to benefit from Canadians having more disposable income in their pockets, RBC analyst Irene Nattel says convenience stores are "on the front lines of this new spending opportunity," especially those attached to gas stations.

"Savings at the pump are likely to drive the purchase of small indulgences in the short-term," Nattel said in a note to clients.