The growth in total consumer spending slowed significantly in June amid lingering worries over high unemployment and the effects of the oil spill in the Gulf of Mexico, according to First Data, a payment card processing firm.
First Data’s SpendTrend Report said overall spending growth declined for the third consecutive month, as total dollar volume growth was 6.8 percent in June, compared with 9.2 percent in May. Total transaction growth was 7.3 percent for June, compared with 8.4 percent in May. The SpendTrend Report tracks consumer spending through credit and debit card transactions at U.S. merchants, including restaurants
Average checks declined overall for the first time since January, the report found. Nationwide average checks fell 0.5 percent in June, led by hefty decreases at restaurants and retail outlets.
Restaurant customers remained cautious about their spending in June. Same-store dollar volume grew only 3.3 percent at restaurants in June, compared with growth of 6.3 percent in May and below the 3.8-percent rate of growth for the first quarter of 2010. The growth in same-store restaurant transactions dipped slightly to 8.7 percent in June compared with the month before, but same-store average checks for the month decreased 5 percent overall, compared with a 3.5-percent decline in May.
The restaurant industry’s 5-percent decline in average checks was the highest among all sectors of the economy First Data tracks, but was still better than quarterly figures for all of 2009, which ranged from a 7.1-percent decrease to a 5.6-percent decrease.
Restaurants and other businesses were hit hardest in the South, where negative effects of the continuing oil spill in the Gulf of Mexico wreaked havoc on consumer confidence and spending as well as tourism dollars crucial to coastal areas. Year-over-year dollar volume grew only 3.8 percent, the lowest figure in the region in eight months and well below the next-lowest growth rate of 6.8 in the Mid-Atlantic.
The Southern region broken out in First Data’s report includes Louisiana, Alabama, Mississippi and Florida, as well as several others on the Atlantic coast.
First Data, whose U.S. headquarters is in Atlanta, is a global technology and payment processing firm, which services more than 5 million merchant locations, more than 2,000 credit and debit card issuers, and millions of consumers worldwide.
Contact Mark Brandau at [email protected].
