Credit card use bounces as in-store spending rises

CREDIT card spending picked up modestly last week, with an increase in in-store spending outweighing an easing of online sales as more stores reopened, Commonwealth Bank says.

“Spending on goods has consolidated at an elevated level, while spending on services has picked up, albeit from very low levels,” the bank said yesterday.

Total retail expenditure is strong mainly because of food retailing – primarily at supermarkets – which had plateaued at an elevated level, CBA said. Spending on drinking at hotels, pubs and bars is ticking upwards but still down from this time a year ago.

Personal care spending has accelerated quickly in the past month, from very low levels.

In a separate report, CBA said home-buying intentions stabilised in May following a big decline in April, especially for owner-occupiers locking in low fixed-rate mortgages.

Intentions to spend on motor vehicles continued to trend down in May, CBA said, in a report that combined household data measures with Google Trends search terms to measure household buying intentions.

Separately, Zip Co released figures based on spending for 1.8 million of its customers, showing that ATM usage was still down 43 per cent in May as the coronavirus crisis accelerated the transition to a cashless society.

“At this rate, it’s not unreasonable to consider Australia could be almost cashless by 2021,” Zip co-founder and chief operations officer Peter Gray said. The Zip Weekly Spending Index showed spending on gyms and fitness centres was down 81 per cent in May, compared with a year ago, while spending on security and safety system installations rose 133 per cent.

Consumers also spent significantly more on roofing, gardening, outdoor and home improvement.