TMCNet:  Spending Slows in September Following Steady Summer Growth

[October 14, 2014]

Spending Slows in September Following Steady Summer Growth

ATLANTA --(Business Wire)--

Following a summer in which spending growth hit several year-long highs, September spending slowed slightly when compared to August numbers. According to the monthly SpendTrend report from First Data Corporation, the global leader in payment technology and services solutions, several factors, ranging from a reduced demand for fall merchandise to unseasonably warm weather, contributed to the slowdown. Overall spending growth in September remained healthy at 3.1% but slipped from August's growth of 3.9%. Year-over-year spending growth, however, was up, driven by categories including Hotel and Travel, where dollar volume growth, strong for most of the summer, came in at 7.9% and 5.2%, respectively.

The First Data SpendTrend® analysis looked at the period Sept. 2 through 30, 2014, compared to Sept. 3 through Oct. 1, 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 in the U.S.

Although retail spending growth was healthy in September at 1.4%, this growth marked a slowdown from August's 2.8%. General Merchandise Stores saw growth at 2.5% in September, down from August's growth of 4.4%, as back-to-school shopping activity slowed. Yet dollar volume growth was up in categories including Building Material and Garden Equipment and Supply Dealers, and Furniture and Home Furnishings, at 4.9% and 2.5% respectively, reflecting a steadily expanding job market and stabilizing housing market.

All regions across the U.S. saw positive year-over-year dollar volume growth but slower sequential spending growth compared to August, due primarily to lower gas prices. Despite heavy rainfall in the Southwest, spending growth was positive at 3.0% and the West saw a healthy growth of 4.0% in September.

Spending and transaction growth on credit cards continued to surpass all other payment types. Credit spending remained healthy on a year-over-year basis at 5.0%, although the category decreased slightly from August. Hotel and Travel spending, where consumers tend to use credit, saw strong year-over-year growth.

September's average ticket growth decreased slightly from August's 1.2%, as lower gasoline prices were seen across the country, although year-over-year growth of 1.0% was positive. Retail average ticket growth of 0.4% in September was down from 0.8% in August, as retailers aggressively discounted end-of-season items.

"With the busy summer now a memory for most consumers, the improving job market supported growth in September, albeit at a slightly slower pace," said Krish Mantripragada, SVP, Information and Analytics Solutions, First Data. "With lower gas prices and the end of the back-to-school shopping season, it was not surprising to see overall spending growth slow slightly from August. We continue to see lenders making credit more readily available, continuing to drive strong results in that category."

September Dollar Volume Growth CHANGE



     
Credit +5.0%
Signature Debit +1.1%
PIN Debit +1.9%
Check +0.5%
Prepaid +5.7%
 

Note: All transactions are same-store growth.

Processing more than 59 billion transactions globally in 2013, First Data has long been a data powerhouse with the ability to help its clients use transaction data to prevent fraud, identify spending patterns and create loyalty programs.

To view infographics showing July SpendTrend data, visit: http://www.firstdata.com/spendtrend/201409/spendtrend-data-201409.png

For more information on First Data SpendTrend, visit www.spendtrend.com or call SpendTrend Customer Care at 800-430-0169.

To participate in the SpendTrend conversation, please follow First Data at http://twitter.com/spendtrend.

About First Data

Around the world, every second of every day, First Data makes payment transactions secure, fast and easy for merchants, financial institutions and their customers. First Data leverages its vast product portfolio and expertise to drive client revenue and profitability. Whether the choice of payment is by debit or credit card, gift card, check or mobile phone, online or at the checkout counter, First Data takes every opportunity to go beyond the transaction. More information about the company is available on FirstData.com as well as on Twitter, LinkedIn, Facebook and YouTube.

First Data Spend Trend, a macro-economic indicator, is based on aggregate same-store sales activity in the First Data Point-of-Sale Network. First Data SpendTrend does not represent First Data's financial performance.


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