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CommBank Card data indicates falls in spending are becoming more widespread

CommBank Card data indicates falls in spending are becoming more widespread

07 April 2020

The following article has been prepared by the Global Economic & Markets Research team.

Coronavirus has dramatically impacted the way we live, work and socialise. This can be seen in weekly CBA card spend data. 

  • CommBank’s credit and debit card spending data shows that spending in the week ending 3 April is down 13% from the previous week and 15% lower than a year ago
  • Falls in spending are becoming more widespread. This is the second consecutive week that spending fell solidly
  • Spending on food services continues to fall sharply
  • However, with all this downturn, home improvements continue to rise

CommBank’s weekly analysis of CBA credit and debit card spending shows how household spending decisions are being affected by the enforced lockdown. Some of the spending patterns that emerged early are now reversing. For example, spending on food, alcohol and health, which grew strongly in early March 2020, are now returning to more normal, or below normal levels. 

Change in card spending in the week ended 3 April 2020 from a year ago and from a week ago

 

Change in card spending in the week ended 3 April 2020 from a year ago and from a week ago

Category

% change on year

% change on week

Food

+4%

-12%

Food goods (mostly grocery stores and supermarkets)

This is expected to ease in coming weeks as stockpiling tapers off.

But it will remain elevated due to the substitution between supermarkets, say, and cafes and restaurants.

+24%

-12%

Food services (includes cafes and restaurants)

To put the 40% year-on-year fall into context, spending in this category was averaging around +20% year-on-year before the Coronavirus struck.

-38%

-15%

Alcohol

-8%

-33%

Alcohol goods (bottle shops)

Like food, consumers may now feel they have enough alcohol stored. Plus, given restrictions on social gatherings, there will be less BBQs, parties and other social occasions.

+28%

-31%

Alcohol services (pubs, hotels, etc)

-71%

-44%

Household furnishings and equipment

It appears households are planning DIY work, maintenance and repairs over the enforced shutdown period.

+20%

-7%

Clothing and footwear

People are largely staying at home so there is less to spend money on these goods. And there is less opportunity to consume these goods with many shops closed.

-60%

-21%

Personal care (beauty and barber shops, massage parlours, etc)

People are largely staying at home so there is less need to look good. And there is less opportunity to consume these services with many hairdressers, spas, etc, closed.

-56%

-46%

Medical care & health

-30%

-27%

Transport (including public transport)

Due to large numbers of workers working from home, the reduction in activity and the movement of people more generally.

-30%

-17%

Recreation (including accommodation, air travel and travel services)

-33%

-10%



Why is this information helpful?

CommBank’s weekly credit and debit card spend data gives you an up-to-date picture of what people are spending their money on and how this is changing as Coronavirus impacts our world and the economy. We will be providing further updates to help you understand the impact that the virus is having on businesses and the broader economy.

Analysis from our CBA credit & debit card spend data shows that nominal spending is down 13% compared to the previous week and 15% lower than a year ago. This is the second week in a row where spending has posted a solid fall.  We expect the volume of consumer spending to drop by around 11% in Q2 20.

Some of the spending patterns that emerged early on in the COVID-19 crisis period are now reversing. In particular, spending on some categories like food, alcohol and health, which grew strongly in early March 2020, are now returning to more normal, or below normal levels.  Spending on food services continues to fall sharply.

The spending categories that have been hit hardest are clothing & footwear and personal care.  Both these categories have posted large falls over the past three weeks and are down 60% and 56% respectively compared to a year ago.  People are largely staying at home (as advised), so there is less need to look good. There is also less opportunity to consume these goods and services with many shops, hairdressers, spas etc now closed.

Source: Commonwealth Bank of Australia, Global Economic & Markets Research report “CBA Card Spend – week ending 3 April 2020”, published 6 April 2020, author Kristina Clifton. Full Global Economic & Markets Research disclaimers can be found at www.commbankresearch.com.au.

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