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September spending shows slight retreat from August

Following a summer in which spending growth hit several year-long highs, September spending slowed slightly when compared to August numbers.

October 14, 2014

Following a summer in which spending growth hit several year-long highs, September spending slowed slightly when compared to August numbers. According to the monthly SpendTrend report from First Data Corporation, several factors, ranging from a reduced demand for fall merchandise to unseasonably warm weather, contributed to the slowdown. Overall spending growth in September remained healthy at 3.1 percent but slipped from August’s growth of 3.9 percent. Year-over-year spending growth, however, was up, driven by categories including Hotel and Travel, where dollar volume growth, strong for most of the summer, came in at 7.9 percent and 5.2 percent, respectively.

The First Data SpendTrend analysis looked at the period Sept. 2 through 30, 2014, compared to Sept. 3 through Oct. 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 four million merchant locations serviced by First Data in the U.S.

Although retail spending growth was healthy in September at 1.4 percent, this growth marked a slowdown from August’s 2.8 percent. General Merchandise Stores saw growth at 2.5 percent in September, down from August’s growth of 4.4 percent, as back-to-school shopping activity slowed. Dollar volume growth was up in categories including Building Material and Garden Equipment and Supply Dealers, and Furniture and Home Furnishings, at 4.9 percent and 2.5 percent respectively, reflecting a steadily expanding job market and stabilizing housing market.

All regions across the U.S. saw positive year-over-year dollar volume growth but slower sequential spending growth compared to August, due primarily to lower gas prices. Despite heavy rainfall in the Southwest, spending growth was positive at 3.0 percent and the West saw a healthy growth of 4.0 percent in September.

Spending and transaction growth on credit cards continued to surpass all other payment types. Credit spending remained healthy on a year-over-year basis at 5.0 percent, although the category decreased slightly from August. Hotel and Travel spending, where consumers tend to use credit, saw strong year-over-year growth.

September’s average ticket growth decreased slightly from August’s 1.2 percent, as lower gasoline prices were seen across the country, although year-over-year growth of 1.0 percent was positive. Retail average ticket growth of 0.4 percent in September was down from 0.8 percent in August, as retailers aggressively discounted end-of-season items.