Citi Australia
Citi Australia Credit Card Index: December 2020 – January 2021
HIGHLIGHTS
December spending hangover dampens January figures
Highlighted Findings:
- Credit card spend in December increased by 11%, a consecutive period of growth following a 9% increase in November.
- Spend in December was almost back at pre-Covid levels, in a positive indication that consumer confidence is returning.
- Spend levels tapered off in January, with spend dropping 19%, as consumers returned to normal following the holidays.
- 'Retail Goods' and 'Sports and hobby stores' lost their spot in the top 5 spend categories in favour of 'Insurance' and 'Health/Medical'.
"Consumers are experiencing a spending hangover, after doing their bit to boost the economy during the November and December silly season. This is in line with expected spend for January, as consumers typically tighten their belt following a period of increased spending due to Christmas and school holidays," said Choong Yu Lum, Head of Credit Cards at Citi Australia.
Top 5 – spend by industry
December
| Category | % share of spend |
|---|---|
| 1. Supermarkets | 10.09% |
| 2. Household goods retailing | 8.71% |
| 3. Business services | 6.43% |
| 4. Retail goods | 5.59% |
| 5. Sports and hobby stores | 5.25% |
January
| Category | % share of spend |
|---|---|
| 1. Supermarkets | 10.73% |
| 2. Household goods retailing | 8.55% |
| 3. Business services | 6.72% |
| 4. Retail goods | 6.31% |
| 5. Sports and hobby stores | 5.25% |
"It's interesting to see the clear shift in consumer behaviour between December and January, as Australians go from 'fun mode', with high spending in the 'retail goods' and 'sports and hobby stores' categories, to organisation mode with 'insurance' and 'health and medical' spend categories ranking higher," Mr Lum said.
Top 3 – spend on rewards points
December
| Category | % share of spend |
|---|---|
| 1. E-Vouchers | 44.22% |
| 2. Gift Cards | 22.10% |
| 3. Select and Credit* | 12.09% |
January
| Category | % share of spend |
|---|---|
| 1. E-Vouchers | 37.39% |
| 2. Gift Cards | 19.46% |
| 3. Select and Credit* | 15.49% |
"Overall, we saw an 11% decrease in rewards redemption in December from the previous month, and a further 27% decrease in January. This indicates that our customers were organised and cashed in their points in November to ease the Christmas spending burden. We saw customers preferring e-vouchers in both December and January, which remains consistent with behaviour from last year as customers are less likely to use rewards for travel related purposes," Mr Lum said.
Lockdown impact on spend remains
In previous months, we have seen a strong correlation between lockdown restrictions and a drop in spend. Lockdown continues to impact consumer spending patterns, with lockdowns in both New South Wales and Queensland during the December – January period causing a drop in spend.
- During the NSW lockdown spend dropped by 14% in the first week of lockdown compared to the prior week
- During the QLD lockdown consumer spend dropped by 13% week on week.
"While consumer spend still drops during periods of lockdown, the extent of the drop has lessened compared to what we saw at the start of the pandemic. This indicates that while staying at home dampens spend, there is more confidence that the economy will bounce back quickly," Mr Lum said.
What's next?
"Many Australians were hoping for an uneventful end to 2020, and a fresh start in 2021. With lockdowns in NSW and QLD demonstrating some uncertainty is here to stay, it is pleasing that we still saw strong spend growth in December. While spend has dipped in January, we anticipate February spend will increase." Mr Lum concluded.