Canadian consumer spending flat in the first quarter of 2014
Moneris Spending Report shows a 0.84 per cent increase; long winter a key contributor
TORONTO, April 23, 2014 /CNW/ - As temperatures dropped, Canadian consumer spending cooled down too, according to Moneris Solutions Corporation ("Moneris"), Canada's largest credit and debit card processor.
Moneris' Quarterly Spending Report for the first quarter of 2014 revealed that compared to the same period last year, consumer spending rose only 0.84 per cent. March saw the largest increase of the quarter, edging up 0.95 per cent, followed by January with a 0.90 per cent increase. February experienced the smallest growth, with a modest 0.66 per cent gain.
"Since we began issuing this report in 2010, we have not reported a flat quarter," said Angela Brown, President and CEO, Moneris Solutions Corporation. "In fact, over the past six months, we have only seen growth of 1.44 per cent, which is not typical."
Categories that have traditionally led quarterly growth remained relatively flat the first three months of the year. Speciality retail stores experienced a modest 0.58 per cent increase, while restaurant spending picked up only 0.06 per cent. Other key categories saw small declines, such as household purchases (-0.90 per cent), hotels (-1.35 per cent) and apparel (-1.35 per cent).
The cold proves costly
Not all categories were subject to modest gains in spending this quarter. Spending on utilities saw the highest year-over-year increase (19.15 per cent), likely reflecting increased heating costs as Canadians dealt with a particularly long and cold winter. Similarly, consumers were forced to spend more on their vehicles, with an increase in maintenance and repair store (7.73 per cent), paint shop (18.74 per cent), and wreckage and salvage yard (14.61 per cent) spending. These increases are likely attributed to this year's harsh winter, poor road conditions and, possibly, increased traffic collisions.
"As we have seen in the past, extreme or prolonged bouts of adverse weather have had a measurable impact on the spending habits of Canadians," said Brown. "The warm weather could not come soon enough for a majority of Canadian retailers."
Ontario restaurant sales spike as a result of Games in Russia
Reason for national celebration helped drive the modest growth in restaurant and bar spending as a result of Canada's hockey victories during the February Games in Sochi, Russia. In particular, the Canadian men's gold medal game against Sweden on February 23, 2014 saw Ontario's restaurant category (excluding Toronto), experience an overall spending increase of 141.60 per cent, compared to the same day last year.
In Toronto, the city council's vote to allow bars and restaurants to serve alcohol as early as 7:00 a.m. during the men's gold medal game, helped increase bar and restaurant sales within the city by an incredible 876.60 per cent on that day.
Credit still the favourite amongst Canadians
The Spending Report also demonstrated a continued preference towards paying with credit, as Canadian credit card spending grew 1.83 per cent while debit purchases dropped -0.63 per cent. Interestingly, contactless credit transactions jumped 85.77 per cent, indicating that both retailers and consumers are taking advantage of easier and faster payment options.
Among Canada's provinces, Saskatchewan led spending growth, with a 2.90 per cent year-over-year increase, followed by Alberta, with a 2.78 per cent gain. Ontario saw a modest 1.32 per cent spending bump. Quebec, New Brunswick and Nova Scotia experienced the smallest gains in Q1 2014, compared to the same period last year (-2.16 per cent, -1.84 per cent and -0.89 per cent, respectively).
About The Moneris Spending Report
The Moneris Spending Report provides a snapshot of consumer spending activity in Canada by analyzing credit and debit card transaction data. As the market leader with the largest merchant base, Moneris presents detailed analysis and insight on a quarterly basis. The percentages cited are derived from actual sales volumes - the dollar values of credit and debit card transactions being processed by Moneris merchants.
About Moneris Solutions
As one of North America's largest providers of payment processing solutions, Moneris Solutions Corporation ("Moneris") offers credit, debit, wireless and online payment services for merchants in virtually every industry segment and processes more than three billion transactions, annually. Moneris also offers electronic loyalty and stored-value gift card programs. With more than 350,000 merchant locations, Moneris provides the hardware, software and systems needed to improve business efficiency and manage payments. For more information please visit www.moneris.com.
SOURCE Moneris Solutions Corporation
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