Atlanta -- A report released Tuesday by First Data Corp. found that dollar volume growth rebounded in January, improving to 6.2% versus 4% in December despite the payroll tax increase.
The First Data SpendTrend report, which tracks same-store consumer spending by credit, signature debit, PIN debit, EBT, closed-loop prepaid cards and checks at U.S. merchant locations, found that improved retail spending was a large contributor to the January growth.
Retailers experienced a healthy rebound in spending as consumers increased discretionary spending during the start of the year. Retail dollar volume growth was the highest growth seen since August 2012. Dollar volume growth in building material & garden equipment & supply dealers and sporting goods, hobby, book & music stores were key contributors to the retail growth.
Average ticket growth of 0.9%, an eight-month high, was a significant improvement versus December. Retail average tickets saw the highest growth seen in over a year as promotional activity by retailers curtailed and shoppers showed an increased propensity to spend more. Sporting goods, hobby, book & music stores in particular saw the largest average ticket growth.
“Consumers showed a willingness to spend despite an increase in payroll taxes. The growth was supported by a number of factors including the short-term resolution of the fiscal cliff scenario, growth in jobs, continued improvement in the housing market and the rising stock market,” said Rikard Bandebo, VP and economist, First Data. “However, merchants will undoubtedly keep a close eye on consumer sentiment in the coming months to determine if shoppers will maintain increased spending as the full impact of the payroll tax hike may not be felt until February or even later out.”