Industry News | March 13, 2013
Consumer Spending Took a Step Back in February
First Data Corporation, a global leader in electronic commerce and payment processing, released its First Data SpendTrendanalysis for the full month of February 2013, compared to February 2012.
SpendTrend tracks same-store consumer spending by credit, signature debit, PIN debit, EBT, closed-loop prepaid cards, and checks at U.S. merchant locations.
Dollar volume growth slowed to 4.6 percent year-over-year compared to January’s growth of 6.2 percent.
A combination of factors such as higher payroll taxes, a delay in federal tax refunds, and high gasoline prices restrained spending and forced shoppers to reassess their spending budgets.
Major winter storms across much of the country and the unseasonably cold weather throughout the South also weighed on shopper foot traffic. Transaction growth slipped to 3.5 percent in February, compared to 5.3 percent last month.
Retail dollar volume growth fell significantly in February to 2.5 percent, compared to January’s growth of 5.7 percent as consumers tightened their discretionary spending budgets. This marked the slowest growth in the past 12 months.
Most retail sub-categories posted slower dollar volume growth. Additionally, retail transaction growth of 0.4 percent marked the slowest growth over the past year and was a substantial slowdown from January’s growth of 2.7 percent.
Overall average ticket growth of 1 percent in February was in line with last month’s growth of 0.9 percent. However, retail average ticket growth of 2.1 percent was down from January’s growth of 2.8 percent as shoppers pulled back spending on higher-priced discretionary items.
Most retail subcategories experienced slower average ticket growth compared to last month.
“The combination of elevated taxes, federal tax refund delays, adverse weather, and higher gasoline prices clearly curbed shoppers’ ability and willingness to shop in February,” says Rikard Bandebo, vice president and economist, First Data.
“The fact that the personal savings rate significantly declined in January and consumers shifted more spending onto credit cards could be a sign that consumers may be overstretched,” he adds. “However, there are many other factors that could impact spending going forward, including an improving labor market, steadily rising home values, healthy gains in the equity markets, and the federal budget sequestration.”
Food & Beverage