May Spending Report Shows That Consumers Are Shopping Around For Better Deals
Shoppers that use debit cards, electronic checks and other digital forms of payment spent 5% less money in May at the stores that they frequented in the past. Although consumers are less likely to patronize stored that they bought products from prior to may, they are also making bigger purchases. This may be a signal that shoppers are visiting fewer stores and spending more money. Because gas prices are increasing, consumers will use circulars and coupons to chart out their shopping habits. These trends mainly apply to food, retail and gas purchases.
This also indicates that consumers may be more likely to look for Black Friday deals towards the end of the summer so that they can have enough time to compare retailers. One of the biggest electronic payment processors, First Data Corp., released its findings at the beginning of June. Although the company can only report purchases made with credit, debit and EBT cards, it is believed that consumers that use cash also follow the same spending trends.
Economists are citing increased unemployment rates as well as steadily increasing gas prices for lower levels in spending. Summer sales may help to stimulate the economy, however, US consumers are more likely to spend money on travel during this time of the year. The latest reporting also shows that consumers are becoming more thoughtful about their purchases. Impulse buying is down, and shoppers may visit multiple stores in order to price luxury items.
Exact numbers for consumer spending in June will not be out for a few more weeks, but there may be a spike because of the Memorial Day holiday. So far, retailers have reported that they received a lukewarm response to Memorial Day sales, but there are still hopes that the economy will improve well before the winter holiday season.