Thursday June 12th, 2014 - 12:58PM
The First Data SpendTrend analysis for May 1 through May 30, just released by First Data Corp. indicated that the pace of consumer spending increased although retail gains were a bit slower than was true in other sectors. The analysis revealed spending growth of 4.2% versus April’s 4.1%.
Warm May weather drove gains, with travel and home improvement being catalysts, according to First Data. Hotel spending growth of 9.3%, a 12-month high, spiked in May and gained substantially from April’s 7%. Travel merchant dollar volume growth of 7.1% also was the highest rate turned in by the sector in over a year and was up considerably over April’s growth of 5.2%, First Data stated. Gas Station spending growth of 3.6% was higher versus 3.3% April growth, and First Data characterized it as another key supporting factor in overall growth as fuel prices remained elevated versus last year.
Retail spending growth of 1.7% topped April’s 1.3% as warmer weather across most regions, except the Northeast, helped retail foot traffic First Data reported. Overall retail spending growth in May marked the strongest increase in seven months, primarily driven by spending at Building Material & Supply Dealers, up 6.7% in May compared to 3.6% in April, and Furniture & Home Furnishings merchants, up 1.4% in May compared to down 0.7% in April.
Average ticket growth of 1.2% in May advanced against April’s 0.5% growth, driven by higher year-over-year gas prices, elevated food prices and an increase in some leisure-related sectors. Flat retail average ticket growth represented an improvement over April’s decline of 1.1% as many retailers returned to full price selling versus the discounting used to speed foot traffic slowed by bad weather, First Data asserted
“A number of factors, including normalized weather, pent-up demand, falling unemployment and rising home prices supported consumers’ willingness to spend in May,” said Krish Mantripragada, senior vp, information and analytics solutions, First Data, in discussing the analysis. “Credit card spending growth continued to be strong and led all other payment types. The surge in spending growth at Hotel and Travel merchants, Building Material & Home Furnishing merchants, where credit is the primary payment tool, was a major driver supported by easing lending standards and payroll growth.”
Payment technology and services solutions provider First Data 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 to develop its SpendTrend report, it pointed out.