Visa Analysis Shows Retail Spending Up in April Across Most Major Categories
Despite growth in 11 of 14 major purchase categories, a Visa survey finds more than half of consumers say they are pocketing savings from lower gasoline prices
“Across the country, we’re seeing consumers continue to spend as their confidence in the economy grows,” said
Several discretionary categories showed solid increases in April from the prior year, with some eclipsing their March growth rates. The increase suggests that American households with incomes greater than
- Restaurant spending rose 9.5 percent from the prior year in April, compared to a 7.6 percent increase in March.
- Hotel spending was up 9.4 percent from the prior year in April, compared to a 9.2 percent increase in March.
Household good spending, at places like electronics, appliance, and furniture stores, increased 5.1 percent in April from the prior year, compared to 1.5 percent in March.
Impact of Gas Prices
Gas prices continue to affect consumers’ mind set and spending behavior. Prices have fallen 30 percent over the last year, averaging
However, a recent Visa survey found that, amid the increase in gas prices that began in February, more than half of respondents (52 percent) said that they planned to save the unexpected windfall from lower prices at the pump, while nearly a quarter (24 percent) said they planned to use it to pay down debt. Only 30 percent said they planned to spend more at other places.
These survey results are evident in Visa’s RSM data. Although April retail spending (excluding autos and gas) was up 4.5 percent from the prior year, it has slowed significantly since the first three months of 2015. In January, when gas prices hit their recent lows, retail spending was up 6.0 percent from the year before. There was also a noticeable impact in consumer spending in several major categories. Some changes include:
- Home improvement spending growth, at places like building supply, hardware, and garden stores, slowed to 4.5 percent in April from the prior year, compared to a 9.4 percent increase in March.
- Clothing store spending increased just 0.1 percent in April from the prior year, after growing by 3.7 percent in March.
- Warehouse and general merchandise spending growth, such as at big-box retailers, slowed to 4.8 percent in April from the prior year, compared to 6.7 percent in March.
- Non-store retail spending growth, such as at online retailers, slowed to 4.6 percent in April from the prior year, compared to 5.5 percent in March.
“What matters is not the price at the pump today, but where consumers see gas prices headed,” noted Best. “After gas prices rose every single day in February, 70 percent of consumers said they expected them to keep rising over the next three months – and not surprisingly, they modified their spending habits. We saw that trend again in April when gasoline prices steadily ticked upward in the latter half of the month, causing consumers to spend more cautiously and pocket much of the savings from lower prices at the pump.”
About Visa’s Retail Spending Monitor
Drawing upon the power of the world’s largest payment network, Visa’s Retail Spending Monitor provides a real-time window into how and where Americans are spending their money -- and its broader impact on the economy. With billions of transactions flowing through its payment network each day, Visa sees roughly
Source: Visa Inc.