RANCHO CUCAMONGA, CA (July 13, 2020) — As lockdown restrictions were lifted and businesses began opening back up in June, consumer spending rebounded. Looking at spending within CO-OP’s own Credit and Debit portfolio, overall debit and credit transactions were down 2 percent and 5 percent, respectively, compared to last year; however, the total dollar amount of those purchases increased 14 percent across debit and 3 percent across credit. The data indicates that members are likely to resume normal spending levels in the short-term despite the long-term uncertainty of COVID-19. It also shows that spending will vary widely across merchant categories, reinforcing the importance of credit unions regularly analyzing their portfolio to identify top-of-wallet opportunities.
Here are the category-level spending trends we are seeing for the month of June (data comparing June 1 – 30, 2020 with June 1 – 30, 2019):
Online Bookstores (Amazon)
Debit: Up 28 percent
Credit: Up 57 percent
CO-OP Analysis: June was another strong month for purchases at online bookstores, specifically Amazon. Amazon continues to be a strong top-of-wallet opportunity for credit unions, particularly as the marketplace begins offering summer deals and discounts.
Airline Travel
Debit: Down 59 percent
Credit: Down 71 percent
CO-OP Analysis: While it may be summer vacation time, members aren’t ready to travel by airplane just yet. Air travel spending remains low despite many airlines significantly lowering fares and some even booking flights up to full capacity. As airlines begin offering more flights, it will be interesting to see if spending on air travel increases accordingly.
Car Rentals
Debit: Up 6 percent
Credit: Down 19 percent
CO-OP Analysis: Road trips by car, on the other hand, are becoming more popular. Debit card purchases at car rental agencies increased in June compared to last year. Recent studies indicate this could be a long-term trend: a survey from the University of Chicago found that 27 percent of consumers anticipated taking more long-distance trips by car post-pandemic.
Barber, Beauty Shops and Spas
Debit: Down 34 percent
Credit: Down 37 percent
CO-OP Analysis: Health and beauty businesses began opening up in many states in June but it appears most members are holding off on that post-pandemic haircut (or perhaps continuing to do it themselves). This may change in July as more businesses begin to implement safety precautions and procedures to put their customers at ease.
Department Stores
Debit: Down 4 percent
Credit: Down 1 percent
CO-OP Analysis: Department stores experienced a little bit of respite from a difficult year with credit card purchases down only 1 percent and debit purchase down 4 percent compared to last year. However, the latest string of bankruptcies by well-established department stores like Macys and Neiman Marcus doesn’t bode well for the industry. Economists predict that the 8,700 retail stores that have closed so far in 2020 is just the tip of the iceberg.
Hardware Stores
Debit: Up 35 percent
Credit: Up 32 percent
CO-OP Analysis: Home improvement spending continues to soar as hardware stores have seen steady positive year-over-year growth over the last several weeks.
CO-OP will continue to monitor trends across its Credit and Debit portfolio and provide solutions to ensure credit unions have what they need to serve their members. For more information on how CO-OP can support credit unions throughout COVID-19, please visit www.co-opfs.org/covid19.
CO-OP Financial Services is a payments and financial technology company whose mission is ensuring the success of the credit union movement. CO-OP payments solutions, engagement services and strategic counsel help credit unions optimize member experiences to consistently provide seamless, personalized multi-channel offerings, while delivering secure, sophisticated fraud mitigation service. For more information, visit www.co-opfs.org.
Bill Prichard, APR
Director, Public Relations
CO-OP Financial Services
(909) 532-9416
Bill.Prichard@coop.org
