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Boston has been under a deep freeze this winter and so has consumer spending, according to a new SpendTrend report by First Data Corp.
While fair weather and an improving economy brought higher sales elsewhere, the analysis of more than 25,000 local Boston merchants showed a drastic drop of 6.2 percent in overall spending during the period of historic blizzards of January and February. Nationally, consumer spending increased 1.5 percent during the same time period.
“While Boston always experiences cold winters, the severity of the storms this year resulted in a major decrease in consumer spending, particularly in merchant establishments that rely on foot traffic or available parking,” said Krish Mantripragada, First Data's SVP of information and analytics solutions. “In 2014, Boston actually saw a modest year-over-year spending growth of 0.9 percent, which was in line with the national average of 1.3 percent. The 2015 winter weather caused spending to plummet 6.2 percent, a notable difference from the positive growth of 1.5 percent that merchants nationwide enjoyed.”
The analysis, which compared spending during the period of peak snowfall from Jan. 24-Feb. 22, 2015 to the same period in 2014, analyzed the greater Boston metropolitan area and all of New England, including Connecticut, Maine, Massachusetts, New Hampshire, Vermont and Rhode Island. Additionally, First Data analyzed spending from more than four million merchants nationwide during the same period to provide a national overview of winter consumer spending.
First Data’s insights also showed that Boston was hit harder by the storms than the rest of New England, where consumer spending decreased 4.4 percent year-over-year. The biggest decline in spending for both Boston and New England occurred during Winter Storm Juno, which took place between Jan. 26-28 and dumped between 20 and 30 inches of snow on Beantown and surrounding cities and towns. By last count, Boston received 105.7 inches of snow this winter –just shy of the 107.6 inches received during the record winter of 1995-1996.
Amid the bad weather that challenged New Englander’s perseverance, there were winners in the retail mix, including grocery stores, which experienced a 7.9 percent increase in spending, compared to an increase of 4.9 percent last year. Additionally, the volume of transactions almost doubled year-over-year for food and beverage stores.
New Englanders seemingly preferred to eat at home rather than dine out as restaurant and bar spending decreased 1.2 percent, a notable change from last year’s positive growth of 7.5 percent within the category.
The retail category in New England impacted the most by the snow was furniture and home furnishings, down 14.7 percent. Clothing and accessory stores and general merchandise stores also experienced a dip in spending, down 6.3 percent and 2.9 percent, respectively.
First Data, a global leader in payment technology and services solutions, analyzed millions of transactions across large and small businesses in the Boston metropolitan area and New England to assess the economic impact of the winter weather. First Data has one of the most complete merchant data sets in the world, powering more than $1.8 trillion in annual transactions across the globe. SpendTrend tracks same-store point-of-sale data by credit, signature debit, PIN debit, EBT, closed-loop prepaid cards and checks.
For the full report and graphics, please click here.