Atlanta -- Hurricane Sandy impacted spending in the Northeast, according to First Data’s most recent SpendTrend report, which analyzed date for the full month of October 2012 compared with October 2011. SpendTrend tracks same-store consumer spending by credit, signature debit, PIN debit, EBT, closed-loop prepaid cards and checks at U.S. merchant locations.
The October report found that despite political uncertainty (data was compiled prior to the election) and the looming fiscal cliff, consumer spending was healthy in October. For the first time since July, credit dollar volume grew faster than PIN and Signature debit. Credit dollar volume growth was 8.9%, a healthy uptick compared with 2.3% last month. The slower growth in debit was largely driven by restrained spending in categories such as general merchandise stores where debit cards are the typical payment method.
“Consumers appear to be in a favorable spending mood heading into the holiday season due to recovering housing prices, slight job gains and modest income growth which has buoyed consumer confidence,” said Rikard Bandebo, VP and economist, First Data. “However, consumers are also reducing their savings to support spend which suggests that current growth rate will not be sustainable in the long term without substantial improvement in the economy.”
In other findings:
• Dollar volume growth of 6.7% in October was healthy as shoppers became less pessimistic about the economy. Improved consumer sentiment and a pullback in savings continued to support spend. Meanwhile, transaction growth slipped to 5.9% in October compared with 6.3% in September.
• Average ticket growth was 0.8% in October, a reversal from September’s -0.5% growth. Several retail categories experienced improved average tickets due to a slight rise in prices.
• Several segments in the Northeast, such as retailers and food and beverage stores, saw a surge in business late in the month as consumers stocked up on supplies and prepared for the storm. However, during Hurricane Sandy’s landfall and shortly after sales were negatively disrupted across most segments as power outages kept shoppers at home.
“In spite of the uncertainty surrounding the economy and Hurricane Sandy, consumer spending growth continues very much in line with the level of growth we have seen over the last six to seven months.
Several segments in the Northeast, such as Building Material & Garden Equipment & Supply Dealers and Food/Beverage Stores saw a surge in business late in the month as consumers stocked up on supplies and prepared for the storm. However, during Sandy’s landfall and shortly after sales were negatively disrupted across most segments as power outages kept shoppers at home.