The Velera Payments Index May 2024: A Deep Dive into Overall Food

Welcome to the newly rebranded Velera Payments Index! Our May 2024 edition reveals growth in consumer spending was modest in April, aligning with slowing economic indicators that could stimulate Fed rate cuts later this year. We also revisit a Deep Dive into Overall Food, which includes groceries and dining out – and provides additional context for inflationary impacts on non-discretionary spending.

Key takeaways include:

• For April, growth rates were positive, but only up modestly year over year. Debit purchases were up 3.2% and credit purchases were up 1.1%. Debit transactions were up 2.7% and credit transactions were up 2.2% year over year.
• The Consumer Price Index (CPI-U) increased 0.3% in April, while the 12-month rate of inflation was 3.4%. Shelter and Gasoline again contributed to more than 70% of the increase. Excluding the volatile Energy and Food sectors, the core CPI index increased 0.3% from March, putting the 12-month Core CPI index at 3.6%. 
• While there was growth in Overall Food purchases (up 1.8% for credit and up 2.5% for debit), consumers are spending slightly less on average in the Grocery Store & Supermarkets segment, which represents the largest portion of Overall Food. The average credit purchase at Supermarkets was $52.98, down 1.6% year to date compared to 2023. The average debit supermarket purchase was $52.09, down 0.5% for the same period.
• For April, total balance transfer dollars were more in line with seasonal changes, down 4% year over year. The volume of balance transfers was down 18% compared to April 2023. The typical seasonal peak in March was greatly reduced and may have spilled into April activity, with income tax filings due on April 15. The average amount of balance transfers was up 16%, or $572, at $4,146.
• The credit card delinquency rate continued to decline in April, finishing at 2.34%.

What should credit unions do now?

• Gauge your success. For your credit and debit portfolios, do you see similar growth rates and mix of transactions? Leverage Member Insight and other tools to see how you are performing. 
• Engage with your members. Members are purchasing food and dining out, likely paying with a debit or credit card. Do you have accountholders with no or low usage in these segments? Can a usage stimulation campaign motivate them to use your card?

Subscribe to our mailing list to receive the Velera Payments Index delivered directly to your inbox each month!