FirstData: Spending slows in September

Atlanta -- 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 Corp., several factors, ranging from a reduced demand for fall merchandise to unseasonably warm weather in parts of the country, contributed to the slowdown. (SpendTrend tracks same-store POS 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.)



Overall spending growth in September remained healthy at 3.1% but slipped from August’s growth of 3.9%. 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% and 5.2%, respectively.



The First Data SpendTrend analysis looked at the period Sept. 2 through 30, 2014, compared to Sept. 3 through Oct. 1, 2013. Although retail spending growth was healthy in September at 1.4%, this growth marked a slowdown from August’s 2.8%.



General merchandise stores saw growth at 2.5% in September, down from August’s growth of 4.4%, as back-to-school shopping activity slowed. Yet dollar volume growth was up in categories including building material and garden equipment and supply dealers, and furniture and home furnishings, at 4.9% and 2.5% 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% and the West saw a healthy growth of 4% 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%, 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%, as lower gasoline prices were seen across the country, although year-over-year growth of 1.0% was positive. Retail average ticket growth of 0.4% in September was down from 0.8% in August, as retailers aggressively discounted end-of-season items.