Canadian consumer spending increased 4.67 percent in the second quarter compared to the same period last year, according to Moneris Solutions, Canada's largest credit and debit card processor. June, however, experienced the smallest growth, at 3.72 per cent, which may point to a slowdown in spending.
"While the Canadian economy continued to experience healthy growth in the second quarter of 2012, some signs point to a potential reduction in spending," said Jim Baumgartner, President and CEO, Moneris Solutions. "The summer months usually translate into more Canadians attending and spending at national and community events. The level of participation and activity in Q3 will be a good indicator of consumer confidence leading into the holiday season."
The entertainment category saw the highest increase in overall spending in Q2, at 9.43 per cent, while hotels and restaurants came in close second, with growths of 6.75 and 6.41 per cent, respectively. It was Canadians' growing appetite for fast food restaurants and acceptance of convenient credit card payment methods that drove the largest increase in spending for the fast food category, with an increase in spend of 10.9 per cent, compared to the same period in 2011.
The specialty retail category also experienced strong growth, with stationery (6.62 per cent), florists (6.33 per cent) and pet shops (6.14 per cent) leading the increase in dollars spent. On the other hand, apparel - a traditionally strong spending category for Canadians - experienced more modest growth, with an increase of 2.74 per cent, compared to the same period last year.
While travel experienced a modest decrease in spending of -0.49 per cent, the Moneris Spending Report shows that Canadians were more eager to pack their bags towards the end of the quarter - likely in anticipation of the summer holidays. As a result, this category saw an overall increase of 10.17 per cent in dollars spent during the month of June, compared to the previous year.
Nationally, the Prairie provinces led the growth in spending, with Alberta earning the country's top spot (with an increase of 8.35 per cent in dollars spent), followed closely behind by Saskatchewan (7.8 per cent). Manitoba also experienced healthy growth last quarter, compared to the same period last year, at 5.89 per cent. While Ontario and B.C. continued to lag in spending, they still showed respectable growth at 3.95 and 3.52 per cent, respectively. PEI and New Brunswick were situated in the middle of the pack, at 5.51 and 4.92, respectively.
Several special holidays in the second quarter contributed to a jump in consumer spending. Both Mother's Day and Father's Day weekends saw increases in spending of 5.95 and 5.09 per cent, respectively, compared to the previous weekend. Once again, Mother's Day weekend saw a massive growth in dollars spent at flower shops, of 205.93 per cent, while men's clothing stores experienced an increase of 24.86 per cent in the number of transactions.
In this quarter, credit card spending (+7.67 per cent) outpaced debit card spending growth (+3.53 per cent) compared to the same period last year. The credit to debit spending ratio was 58.9 per cent to 41.1 per cent, with B.C. showing the highest ratio, at 63 per cent to 37 per cent.
As for the average transaction amount on credit and debit cards, it remained similar compared to the same period in 2011 - at $105.77 and $47.52, 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 merchants.
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