First Data: Harsh winter cuts into February sales

Atlanta -- Severe winter weather hindered shopping activity in February, according to First Data Corp.'s SpendTrend report, which tracks same-store POS data by credit and debit cards, closed loop prepaid cards, EBT, and checks from the nearly four million retail locations serviced by First Data.

Consumer spending was also restrained by the termination of emergency unemployment insurance, a reduction in food stamp benefits and low-income growth, First Data said.

Dollar volume growth remained positive at 2.4%, but marked a slight slowdown versus January’s 2.5% growth as severe winter weather lingered into February. Spending growth did gain momentum near the end of the month as temperatures turned warmer and tax refunds increased, especially since refund volumes and values were slightly up versus last year.

Retail spending growth of -0.3% was up from January’s growth of -0.9%, but remained in the red as back-to-back snowstorms hit the Northeast and storms in the South forced store closures. Most retail sub-categories in February posted negative year-over-year growth. Stores benefitted from the inclement weather early in the month as consumers sought out more winter supplies, but also saw strong sales at the end of the month as warmer weather spurred home improvement and spring-related sales. Meanwhile, spending growth at non-store retailers marked the highest growth in a year as consumers shopped from home during severe weather.

Average ticket growth of 0.2% in February slipped slightly versus January’s growth of 0.4%. Meanwhile, retail average ticket growth of 0.1% marched up compared to January’s growth of -0.4% as retailers curtailed aggressive discounting as winter inventories started to clear out and spring goods arrived. Most retail sub-categories saw stronger sequential average ticket growth versus January.  

“Consumer spending growth was again unfavorably impacted by severe weather across the nation, which hindered shopping activity for most of the month,” said Krish Mantripragada, senior VP, Information and Analytics Solutions, First Data. “Credit card spending growth continues to be strong as consumer confidence remains pinned near post-recession highs, which has fueled consumers’ appetite for credit and should support more spending growth.”

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