With the uncertainty of the ongoing economic impact of COVID-19, it is more important than ever for credit unions to be aware of and serve their members’ financial needs. To identify what these needs are, credit unions need to have a deep understanding of their members’ purchasing behaviors and transaction trends.

To delve into consumer trends in the COVID-19 era, and how credit unions can use these trends to better serve their members, Payments Journal sat down with Glynn Frechette, Senior Vice President, Advisors Plus at PSCU, and Norm Patrick, Vice President, Advisors Plus at PSCU, and Peter Reville, Director of Primary Research Services at Mercator Advisory Group.

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How Consumer Spending is Changing During COVID-19

PSCU’s Advisors Plus and Data & Analytics teams are closely tracking transactions to identify the impact COVID-19 is having on consumer behavior. Since the pandemic began, there have been noteworthy changes in debit and credit spending in key merchant verticals.

The following is a snapshot of the year to year changes between the 13th week of 2020 (beginning March 23) and the 13th week of 2019 (beginning March 26):

Grocery Stores/Supermarkets

Grocery stores and supermarkets saw a substantial bump in spending over the previous two weeks, but the week of March 23 returned to a much lower growth rate of 24.9% for credit card and 10.0% for debit card. This indicates that consumers are easing back from their “stock-up” purchases conducted during the early weeks of the COVID-19 pandemic.

Drug Stores/Pharmacies

These performed well over the prior two weeks, but the week of March 23 yielded much different results. Credit card spending at drug stores grew by only 0.7%, and debit card spending was actually down 7.5%. In the prior week, the growth rates were both very much positive at 33.0% and 27.4%, respectively. 

Gas Pumps

Purchases made at gas pumps have been on a sharp decline over the past three weeks, with spending down 52.2% for credit card and 40.1% for debit card during the week of March 23. Lower gasoline prices at the pump and decreased transaction activity, likely driven by the substantial increase in remote work and stay-at-home orders, contributed significantly to these declines.

Consumer Goods

Sales of consumer goods have also begun to decline significantly, with an 18.6% decrease in credit card spending and a 17.7% decrease in debit card spending for the week of March 23.