RANCHO CUCAMONGA, Calif.—Despite growing concerns over the COVID-19 Delta variant, card spending in key areas continued to grow in July, CO-OP Financial Services is reporting.
“For now, consumers have extra cash on hand, thanks to a rebounding jobs market and expanded federal child tax credit payments, which began hitting share accounts in July. That has translated to a month-over-month boost in both credit and debit spending in categories like dining and entertainment, education, gas, lodging, medical and travel,” CO-OP stated.
Citing spending trends data compiled by CO-OP’s SmartGrowth Consulting Team, the CUSO said a big surprise was a marked increase in grocery credit spend.
“One of the biggest surprises in July spending was the growth in credit transaction volume within the grocery merchant category, both on a month-over-month and year-over-year basis.
Month-over-month, grocery rose by 61% in transaction count and 54% in transaction amount, resulting in a whopping 133% increase in interchange revenue. Year-over-year, the results were similar, with increases of 54%, 41% and 109%, respectively.
‘The Big Story’
“This has been the big story of the summer so far,” said John Patton, CO-OP senior payments advisor. “As consumers got back to throwing July 4th barbecues and graduation parties with family and friends, it led to bigger grocery shopping bills. We’re looking for this trend to peak in August and September, with Labor Day festivities and football tailgating coming back into favor for now.”
CO-OP noted consumers took to the roads and the skies in July, with the travel, lodging, gas and dining/entertainment categories all enjoying double-digit month-over-month credit spend growth in July, and smaller single-digit increases in debit.
“Interestingly, while camping and home improvement credit spend also grew strongly in July, both categories trended down in debit. This may simply reflect a natural pull-back from the unprecedented growth seen in these categories last summer, when coronavirus lockdowns spurred a rise in ‘staycation’ and ‘nearcation’ activities, trends that have decreased as the economy has reopened this year,” CO-OP stated.
Retail Sales Increase
CO-OP noted that according to Mastercard’s July SpendingPulse report, U.S. retail sales jumped by nearly 11% year-over-year in July, led by department stores with 44.8% growth. The report also showed that in-store purchases excluding auto accounted for more than four out of five retail sales in July – a 15% increase as compared with July 2020.
“Within CO-OP’s portfolio, July debit interchange revenues within the retail merchant category jumped by 16% year-over-year. Meanwhile, credit retail interchange fell year-over-year by -17%, illustrating how credit is still trending behind debit overall, although the gap is starting to narrow,” CO-OP said.
Month-Over-Month Category-Level Spending (Comparing July 2021 to June 2021)
Amazon/Bookstores
Transaction Volume (#):
- Credit: Up 11%. Debit: Down 6%.
Transaction Amount ($):
- Credit: Up 6%. Debit: Down 12%.
Interchange ($):
- Credit: Up 20%. Debit: Down 8%.
Digital Goods
Transaction Volume (#):
- Credit: Up 21%. Debit: Up 3%.
Transaction Amount ($):
- Credit: Up 21%. Debit: Up 3%.
Interchange ($):
- Credit: Up 23%. Debit: Up 3%.
Dining and Entertainment
Transaction Volume (#):
- Credit: Up 24%. Debit: Up 5%.
Transaction Amount ($):
- Credit: Up 22%. Debit: Up 5%.
Interchange ($):
- Credit: Up 24%. Debit: Up 5%.
Education
Transaction Volume (#):
- Credit: Up 14%. Debit: Down 2%.
Transaction Amount ($):
- Credit: Up 22%. Debit: Up 4%.
Interchange ($):
- Credit: Up 22%. Debit: Up 2%.
Gas
Transaction Volume (#):
- Credit: Up 65%. Debit: Up 5%.
Transaction Amount ($):
- Credit: Up 56%. Debit: Up 8%.
Interchange ($):
- Credit: Up 106%. Debit: Up 7%.
Grocery
Transaction Volume (#):
- Credit: Up 61%. Debit: Up 4%.
Transaction Amount ($):
- Credit: Up 54%. Debit: Up 3%.
Interchange ($):
- Credit: Up 133%. Debit: Up 4%.
Lodging
Transaction Volume (#):
- Credit: Up 29%. Debit: Up 6%.
Transaction Amount ($):
- Credit: Up 31%. Debit: Up 8%.
Interchange ($):
- Credit: Up 29%. Debit: Up 7%.
Medical
Transaction Volume (#):
- Credit: Up 17%. Debit: Up 4%.
Transaction Amount ($):
- Credit: Up 15%. Debit: Up 2%.
Interchange ($):
- Credit: Up 16%. Debit: Up 3%.
Retail
Transaction Volume (#):
- Credit: Down 24%. Debit: Up 2%.
Transaction Amount ($):
- Credit: Down 18%. Debit: Up 1%.
Interchange ($):
- Credit: Down 23%. Debit: Up 1%.
Travel
Transaction Volume (#):
- Credit: Up 26%. Debit: Up 8%.
Transaction Amount ($):
- Credit: Up 16%. Debit: Up 1%.
Interchange ($):
- Credit: Up 16%. Debit: Up 1%.
Computers
Transaction Volume (#):
- Credit: Up 73%. Debit: Down 6%.
Transaction Amount ($):
- Credit: Up 47%. Debit: Down 8%.
Interchange ($):
- Credit: Up 77%. Debit: Down 7%.
Office
Transaction Volume (#):
- Credit: Up 24%. Debit: Up 7%.
Transaction Amount ($):
- Credit: Up 8%. Debit: Down 2%.
Interchange ($):
- Credit: Up 8%. Debit: Up 7%.
Campers & Camping
Transaction Volume (#):
- Credit: Up 17%. Debit: Down 4%.
Transaction Amount ($):
- Credit: Up 7%. Debit: Unchanged 0%.
Interchange ($):
- Credit: Up 12%. Debit: Down 1%.
Home Improvement
Transaction Volume (#):
- Credit: Up 22%. Debit: Down 5%.
Transaction Amount ($):
- Credit: Up 13%. Debit: Down 6%.
Interchange ($):
- Credit: Up 21%. Debit: Down 6%.