First Data: Spending down in January as winter weather takes toll

Atlanta -- Consumer spending growth declined from December to January, but remained relatively healthy at 2.5%, according to First Data’s January 2014 SpendTrend report. 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 U.S. merchant locations serviced by First Data. The report cited the severe winter weather that pummeled the Midwest and eastern half of the country as a factor in the decline.

Overall transaction growth of 2.1% in January also slowed from December’s growth of 3.1%. Despite the slowdown, the overall spending growth remained healthy as several categories such as food & beverage stores, general merchandise stores and building material & supply dealers saw robust growth at 3.7%, 2.1% and 4.5% respectively as consumers stocked up on necessities and winter related items in response to the unusually cold weather and potential power outages.

Retail dollar volume growth downshifted to -0.9% in January versus last month’s growth of 1.2%. The slowdown was at least partially attributable to the winter storms that affected retail purchases across much of the country.

 However, dollar volume growth at general merchandise stores and building material & supply dealers remained positive with growth of 2.1% and 4.5%, and helped to offset the overall slowdown as consumers sought out winter weather supplies.

Average ticket growth of 0.4% remained relatively in-line with December’s growth of 0.2%. However, retail average ticket growth of -0.4% fell from last month’s growth of 0.4% as retailers implemented widespread discounting in preparation for spring restocking and as shoppers gravitated toward those bargains.

“The harsh weather conditions in January subdued some of the consumer spending growth and negatively impacted shopper foot-traffic; however, consumers’ also shifted their attention toward basic commodities versus more discretionary items in preparation and response to the severe weather,” said Krish Mantripragada, senior VP, information and analytics solutions, First Data. “Spending on credit continued to exhibit healthy growth in January as lending standards continued to ease and consumer confident levels remained relatively positive.”

 

Recommended stories

Login or Register to post a comment.