Consumer spending growth slowed in November despite strong holiday retail sales on Thanksgiving and the next day, according to First Data Corp., a global payments processing and electronic commerce company.
First Data Corp., a global payments processing and electronic commerce company, released its SpendTrend analysis for the period covering October 31 to December 2.
Dollar volume growth of 4.4% marked a downtick from the previous month's growth of 6.8%. While the cold and dry weather at the end of the month offered ideal holiday shopping weather, several portions of the country earlier had dealt with poor weather that hindered shopper foot traffic. Transaction growth slipped to 4.8% compared to the previous months growth of 6.2%.
Still, overall spending growth remained positive on a year-over-year basis, as it has throughout 2013, and was supported by stronger spending at travel and hotel merchants, which saw robust growth of 9.0% and 6.4% as more consumers traveled for Thanksgiving.
SpendTrend tracks same-store point-of-sale data by credit, signature debit, PIN debit, EBT, closed-loop prepaid cards and checks at U.S. merchant locations.
Retail growth cooled in spite of strong spending growth on Thanksgiving and Black Friday. Spending growth was strong at 9.0% on Thanksgiving and Black Friday. There were fewer holiday shopping days this November after Thanksgiving versus last year, the impact of which was felt across most merchant categories.
Overall retail spending growth was 1.3% and was a significant step down from Octobers 5.6% spending growth. Shoppers pulled back on retail spending for most of the month in anticipation of holiday deals at the end of November. Building material and supply dealers and furniture and home furnishing merchants continued to see robust growth at 7.2% and 7.0% as consumers sustained their focus on home improvement projects.
Average ticket growth was -0.3% in November versus Octobers growth 0.5%. The underperformance of gas station average tickets at -4.2% continued to offset the overall growth. Average ticket growth at gas stations has remained in the negative territory for the past four-consecutive months. The slower growth was also attributable to price discounting by retailers. Retail average ticket growth was 0.6% compared to 1.8% last month.
Although spending growth increased on a year-over-year basis, the growth slowed on a sequential basis as consumers were more modest in their purchases throughout the month as they prepared for the holiday shopping season, said Krish Mantripragada, senior vice president, Information and Analytics Solutions, First Data. We definitely see that consumers are more confident and have enjoyed stronger income growth in 2013 compared to 2012. This should encourage shoppers to open up their wallets as the holiday season progresses.
