Consumer spending shows healthy year-over-year growth
Atlanta, GA – First Data Corporation, the global leader in payment technology and services solutions, today released its First Data SpendTrend® analysis for May 1, 2014 through May 30, 2014, compared to May 2, 2013 through May 31, 2013. SpendTrend tracks same-store point-of-sale data by credit, signature debit, PIN debit, EBT, closed-loop prepaid cards and checks from nearly four million merchant locations serviced by First Data.
Spending growth in May was 4.2 per cent, compared to 4.1 per cent in April. Spending was driven by May’s warm weather which specifically spurred spending on travel and home improvement. Hotel spending growth of 9.3 per cent, a 12 month high, spiked in May versus seven per cent a month earlier. Related dollar volume growth of 7.1 per cent at travel merchants was also the highest growth in over a year and was up considerably over April’s growth of 5.2 per cent. Gas station spending growth of 3.6 per cent was higher compared to April’s growth of 3.3 per cent and was another key supporting factor in overall growth as gas prices remained elevated versus last year.
Retail spending growth of 1.7 per cent marked a slight uptick compared to April’s growth of 1.3 per cent as warmer weather across most regions, with the exception of the Northeast, supported retail foot traffic. Overall retail spending growth in May marked the strongest growth in seven months, primarily driven by spending at building material & supply dealers (6.7 per cent in May versus 3.6 per cent in April) and furniture & home furnishings merchants (1.4 per cent in May vs. -0.7 per cent in April).
Average ticket growth of 1.2 per cent in May gained steam against April’s 0.5 per cent growth, driven by higher year-over-year gas prices, higher food prices, and an increase in some leisure-related categories. A flat retail average ticket growth was an improvement over April’s growth of -1.1 per cent as many retailers returned to full price selling versus discounting used to boost foot traffic during and after the extended winter.
“A number of factors, including normalized weather, pent-up demand, falling unemployment, and rising home prices supported consumers’ willingness to spend in May,” says Krish Mantripragada, SVP, information and analytics solutions, First Data. “Credit card spending growth continued to be strong and led all other payment types. The surge in spending growth at hotel and travel merchants, building material & home furnishing merchants, where credit is the primary payment tool, was a major driver supported by easing lending standards and payroll growth.”