Thursday, August 2, 2018
According to transaction data collected from 1.3 million U.S. merchant locations by First Data Corp., growth in retail spending continued at a steady pace across most sectors during the second quarter of 2018. Nationwide, Washington ranked as the top city for retail spending growth, up 6.4 percent for the quarter, followed by Houston and Boston.
Among retail categories measured, gasoline stations tracked the highest rate of growth, at 16.5 percent year-over-year for the quarter, followed by movie theaters (14.8 percent), computer software stores (12.5 percent), steamship/cruise lines (9.9 percent), shoe stores (8.1 percent) and specialty retailers (7.6 percent). Sporting goods-hobby-book-music and furniture-home furnishings were the two retail categories that saw quarterly declines.
Several factors were attributed to driving spending growth, including high post-recession consumer sentiment index and small business optimism index readings. In addition, the pace of transaction growth was twice that of average ticket growth. And businesses expressed optimism about the future: roughly one-third of small and midsize businesses anticipated higher sales in the third quarter.
When comparing brick-and-mortar and ecommerce sales channels, First Data found that in-store spending maintained a steady 4 percent year-over-year growth, up from 3.2 percent in the first quarter of 2018. However, ecommerce growth slowed to 6.7 percent, down from 8.7 percent the previous quarter, and represented 30 percent of total spend.
Non-retail spend has outpaced retail for the past five quarters, up 5.7 percent, versus 4.2 percent for retail, according to First Data. Of the non-retail categories measured, which include gasoline, restaurant, motor vehicles and parts, food and beverages, travel, hotels and leisure, the leisure category was the only segment to experience negative year-over-year growth in the second quarter channel wide.
First Data also noted that restaurants are outpacing grocers, as millennials eat out more frequently. Quick-service restaurants dominated with 38 percent of restaurant spend, while upscale dining struggled. In the second quarter, restaurant spend increased 3.6 percent year over year, compared with 1.7 percent for grocers. But average ticket growth dipped to 1.3 percent for restaurants and grocers, versus 2.4 percent and 1.9 percent, respectively, the prior quarter.
For more information and to view First Data’s full report, 2018 Payments and Commerce Mid-Year Review, visit www.firstdata.com/spendtrend.
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