Consumer spending growth was down 4% in May. And several retail categories decelerated their pace, including clothing and accessories stores, which retreated to negative 1.7% growth after a very strong pace of 3% growth the month prior, according to the May 2017 SpendTrend report by technology payments company First Data.
Retail specifically slowed to 2.4% growth from 3.9% in April. The monthly differences can be somewhat attributed to Easter and spring-related spending in April, while Memorial Day shopping had little impact in May. Not to mention, for these categories consumers had pulled back after a few months of aggressive spending supported by late tax refunds.
Other retail areas that slowed in May included general merchandise stores, which showed a negative 1.8% growth compared to 2.3% in April. Other slower areas included building materials, electronics and appliances, furniture and sporting goods.
“Although we were expecting retail sales in general to cool down, we were surprised to see such a steep drop within clothing and accessories stores and within general merchandise stores,” Mike Spriggs, director of product development, information and analytics services at First Data told FierceRetail. “Easter occurring in April 2017 (versus March in 2016) helped to give a boost to these categories, but there seemed to be no sustained, ‘halo’ effect on sales for these categories into May.”
The one bright spot was health and personal care, which experienced a 7% growth.
All payment types slowed for the month. Credit card spending growth was down to 6.2% from 7.2% in April. PIN debit slowed down the most across all payment types, to 4.9% growth from 6.8% in April.
However, even though the ticked price slowed in May to 1.7%, ticket growth in retail grew slightly, 0.9% compared to 0.6% in April, driven mostly by higher ticket growth rates in clothing and accessories stores, furniture, and continued strong growth in health and personal care stores.
Spriggs concluded that barring some unforeseen shock, credit will probably stay along its current trajectory.