Snow Damaged Boston Economy: First Data
New England credit unions may see a dip in their card interchange income this quarter, according to First Data Corporation.
The payments processor reported March 11 that this winter’s cold and snowy weather cut consumer spending in Boston by 6.2% during January and February. By comparison, the payments processor reported that the nationwide consumer spending average increased by 1.5% over the same 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, SVP, Information and Analytics Solutions, First Data. “In 2014, Boston actually saw a modest year-over-year spending growth of 0.9%, which was in line with the national average of 1.3%. The 2015 winter weather caused spending to plummet 6.2%, a notable difference from the positive growth of 1.5% that merchants nationwide enjoyed.”
First Data analysts compared consumer spending based on merchant reports from Jan. 24 to Feb. 22 and the same period in 2014. While looking at merchant reported spending nationwide, the firm also analyzed greater New England, including Connecticut, Maine, Massachusetts, New Hampshire, Vermont and Rhode Island.
First Data’s insights also showed the storms hit Boston harder than the rest of New England, where consumer spending decreased only 4.4% 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 and 28 and dumped between 20 and 30 inches of snow on Boston and surrounding cities. By last count, Boston has received 105.7 inches of snow this winter, just shy of the 107.6 inches received during the record winter of 1995-1996.
However, the payments processor reported some firms had better sales during the stormy period. Grocery stores saw their sales climb 7.9%, compared to 4.9% over the same time last year. Other food and beverage stores also saw strong increases while spending at bars and restaurants declined by 1.2%, compared to a 7.5% increase last year.
The other retail categories taking strong hits were furniture and home furnishings stores, down 14.7% and clothing stores, down 6.3%, the processor reported.