Boston has been under a deep freeze this winter and so has consumer spending according to a new SpendTrend report released by First Data Corporation, the global leader in payment technology and services solutions. While fair weather and an improving economy brought higher sales elsewhere, the analysis of more than 25,000 local Boston merchants showed a drastic drop of 6.2 percent in overall spending during the period of historic blizzards of January and February. Nationally, consumer spending increased 1.5 percent during the same time period.
“While Boston always experiences cold winters, the severity of the storms this year resulted in a major decrease in consumer spending, particularly in merchant establishments that rely on foot traffic or available parking,” says Krish Mantripragada, senior vice president of Information and Analytics Solutions at First Data. “In 2014, Boston actually saw a modest year-over-year spending growth of 0.9 percent, which was in line with the national average of 1.3 percent. The 2015 winter weather caused spending to plummet 6.2 percent, a notable difference from the positive growth of 1.5 percent that merchants nationwide enjoyed.”
The analysis, which compared spending during the period of peak snowfall from January 24–February 22, 2015 to the same period in 2014, analyzed the greater Boston metropolitan area and all of New England, including Connecticut, Maine, Massachusetts, New Hampshire, Vermont, and Rhode Island. Additionally, First Data analyzed spending from more than four million merchants nationwide during the same period to provide a national overview of winter consumer spending.
First Data’s insights also showed that Boston was hit harder by the storms than the rest of New England, where consumer spending decreased 4.4 percent year-over-year. The biggest decline in spending for both Boston and New England occurred during Winter Storm Juno, which took place between January 26 and 28 and dumped 20–30 inches of snow on Boston and surrounding cities and towns. By last count, Boston has received 105.7 inches of snow this winter, just shy of the 107.6 inches received during the record winter of 1995–1996.
Amid the bad weather that challenged New Englander’s perseverance, there were winners in the retail mix, including grocery stores, which experienced a 7.9 percent increase in spending, compared to an increase of 4.9 percent last year. Additionally, the volume of transactions almost doubled year-over-year for food and beverage stores. New Englanders seemingly preferred to eat at home rather than dine out as restaurant and bar spending decreased 1.2 percent, a notable change from last year’s positive growth of 7.5 percent within the category.
The retail category in New England impacted the most by the snow was furniture and home furnishings, down 14.7 percent. Clothing and accessory stores and general merchandise stores also experienced a dip in spending, down 6.3 percent and 2.9 percent, respectively.
First Data analyzed millions of transactions across large and small businesses in the Boston metropolitan area and New England to assess the economic impact of the winter weather. First Data has one of the most complete merchant data sets in the world, powering more than $1.8 trillion in annual transactions across the globe. SpendTrend tracks same-store point-of-sale data by credit, signature debit, PIN debit, EBT, closed-loop prepaid cards, and checks.