News

Report says August retail spending growth strongest in 13 months

Leisure spending is at a six-month high; late-season travel, back-to-school spending propel growth.

September 12, 2014

The combination of consumers soaking up the last weeks of summer before and during Labor Day weekend along with August back-to-school shopping helped power the strongest retail spending growth in 13 months, according to data reported by First Data Corp.

The First Data SpendTrend report examined the period for Aug. 2 through Sept. 2, 2014, compared to Aug. 1 through Sept. 1, 2013. SpendTrend tracks same-store point-of-sale data by credit, signature debit, PIN debit, EBT, closed-loop prepaid cards and checks from nearly 4 million merchant locations serviced by First Data in the U.S.

Driven by August vacations, leisure spending growth rebounded in August, and at 3.3 percent was the strongest in six months. As summer waned, vacationers contributed to the rise in year-over-year spending growth in the Hotel and Travel categories, at 9.3 percent and 5.1 percent growth, respectively, a marked improvement when compared to last month's spending growth of 7.9 percent and 4.6 percent.

Overall retail spending growth was the strongest in over a year with retail dollar volume growth at 2.8 percent in August (vs. 2.6 percent in July), as back-to-school shopping propelled spending growth in several retail categories. Dollar volume growth at Furniture and Home Furnishings and General Merchandise Stores was positive on a year-over-year basis and increased sequentially compared to July with a growth of 4.5 percent and 4.4 percent, respectively.

August's overall average ticket growth remained positive at 1.2 percent, slipping slightly from July's 1.5 percent on a year-over-year basis. Gasoline station average ticket growth fell to -2.3 percent compared to July's decline of -0.2 percent as gasoline prices fell on both year-over-year and month-to-month bases. Meanwhile, the average ticket growth of 0.8 percent was an improvement over 0.4 percent last month as retailers were less aggressive with price discounting.

"Two important factors — back-to-school spending and late summer vacationing — contributed to strong overall consumer spending in August, and despite stagnant wage growth and a moderate housing market, consumer confidence rose in August," said Krish Mantripragada, SVP, information and analytics solutions, with First Data, in the announcement. "Robust credit card spending at 5.8 percent was healthy again last month, surpassing both PIN and signature debit growth."