COVID-19: Emerging Trends in Consumer Spending

The coronavirus pandemic continues to have a significant impact on consumer spending behavior and some noteworthy trends are emerging.

Not surprisingly, March spending weakness continued into April, with the decline from March to April lower than the decline observed from February to March. Analysis shows that year-over-year consumer spending decelerated from -17.4% in March, to -19.6% through the first 14 days of April. However, growth for the first two weeks of April appeared materially better than the March exit rate.

Here are a few spending trends that are being monitored due to their impact on transaction volumes and revenue generated from these transactions:

Food, Beverage, and Grocery

Growth rates have declined in the last few weeks due to consumers reducing their number of shopping trips and working through their stockpiles of supplies. While the number of transactions in this sector may have declined, the less frequent stops at these locations have resulted in higher average ticket prices per transaction. At these merchant locations, transactions have also shifted based on how consumers are shopping today as social distancing practices have changed many of these items from being processed as card present to card not present transactions.

Dining Out and Restaurants

Growth declines appear to have stabilized in April due to consumers and service providers reaching an equilibrium between demand and new meal distribution models, such as takeout only and curbside pick-up practices. While all restaurant categories have experienced negative year-over-year sales growth since February, quick service restaurants have fared better than most with only a -19.6% loss in year-over-year sales growth. This is significantly lower than the -40% average year-over-year loss for all restaurant types with upscale dining having the highest loss at -88.5%.

Building Materials and Garden Supply

Growth rates have returned to their pre-COVID range of a 3% year-over-year increase. This industry saw a spike of a 16% year-over-year transaction growth in March. This is attributed to a consumer push to complete home and DIY projects during stay at home mandates.

Electronics and Appliances

After an initial rush to purchase electronics to support remote work, distance learning, and home entertainment needs, this sector experienced a sharp negative trend in early April with a year-over-year transaction growth change of -23%. Experts will be watching this merchant group closely for its impact on interchange revenue due to the traditionally large ticket purchases made at these merchants.

Gas Stations

The demand for gas continues to be low due to stay at home orders. However, volumes appear to have leveled out in early April. At this time, year-over-year transaction growth is down by -34% but is expected to climb as states start to loosen restrictions and summer approaches.


This is one of the hardest hit categories of late due to temporary store closures mounting in early April. In addition, the demand for clothing has dropped as consumers have little need for new clothing based on their limited access to physical events and activities that would typically drive them to make these purchases. These closures and spending patterns have resulted in a -98% year-over-year transaction growth for this industry.

As you can see, the actions taken to prevent the spread of COVID-19 have impacted the entire merchant industry, which in turn will impact credit unions and the revenue they generate from payment transactions. As states begin to lift restrictions and the economy rebounds, we expect transaction growth to return to normal levels at a slow rate. We will continue to monitor these trends and will provide updates on important shifts that impact credit unions and their payment volumes.


Rebekah Higgins is Synergent’s Payment and Fraud Consultant. For over 20 years, she has worked with credit unions of all sizes to ensure functions such as card services, ATM, check processing, and shared branching operate seamlessly and meet the needs of their members. Her depth of knowledge on payment products and services has led her to become a sought-after subject matter expert who frequently is interviewed in the media about the latest payment and fraud trends.