For Immediate Release
Citi Australia
Citi Australia Credit Card Index: June 2021
HIGHLIGHTS
Increased spend levels unhindered by latest COVID outbreak
Highlighted Findings:
- Spend on credit cards crept higher for the second month in a row. The recent lockdowns across NSW, QLD, WA and NT proved no barrier to spending, with Citi recording a 7% overall increase in spend for the last week of June.
- Instalment plans on credit cards continue to rise in popularity with Citi customers 20 times more likely to pay in instalments than customers at other banks.
- Despite school holidays, spend in Airlines and Restaurant categories have decreased as many states brace for extended periods at home.
"Last year, lockdown anxieties triggered a drop in consumer spending. However, the data for June indicates consumers are no longer spooked by lockdowns, with heightened government restrictions appearing to bear no impact on volumes of monthly spend. The final week of June, in spite of lockdowns across the nation, saw the biggest spend of the month," said Choong Yu Lum, Head of Cards and Loans at Citi Australia.
Winter holidays bump up spend
"School holidays continue to drive up spend figures. When we break down weekly spend in June, the commencement of the first week of holidays saw a 7% increase in spend across Australia.
A locked-down NSW lagged behind with spend increasing only 1% on the previous week, coinciding with the COVID outbreak and heightened restrictions in Greater Sydney," Mr Lum said.
Top 10 – spend by industry
June
| Category | % share of spend |
|---|---|
| 1. Supermarkets | 9.48% |
| 2. Household goods retailing | 7.92% |
| 3. Business Services | 6.90% |
| 4. Insurance | 6.31% |
| 5. Health/Medical | 5.61% |
| 6. Legal/Tax Services | 4.95% |
| 7. Restaurants | 4.70% |
| 8. Sports and hobby stores | 4.26% |
| 9. Retail Goods | 4.14% |
| 10. Hotels, resorts and spas | 3.55% |
"Our top 10 industries by share of spend remains unchanged this month, another positive indication that lockdowns have had minimal impact on consumer habits," Mr Lum said.
"While consumer spend has remained high overall, it is clear that certain industries are feeling the brunt of this month's COVID outbreaks. Restaurants, ranked 7th in terms of share of spend, are down 9% since previous month. Meanwhile, the Hotels, Resorts and Spas category saw only 2% increase since last month, much lower than anticipated for the school holiday period. Similarly, Airline spend fell 23% this month as Australians struggled to holiday interstate."
Credit card instalment plans on an upward trajectory
"As Australians continue to seek flexible ways to manage their money, Citi's credit card instalments business has recorded significant growth. Through instalments, consumers can break up payments into smaller amounts, in the style of buy now pay later. The latest industry research indicates Citi customers are 20 times more likely to pay in instalments than customers at other banks.
As it stands, about 13% of Citi's customers use, or have tried, the instalment payment option, with Instalment sales growing 12% year on year," said Lum.
What's next?
"Next month, we will be looking closely at how the government's response to COVID outbreaks impacts household spend. We anticipate that in line with strengthening consumer confidence, impending lockdowns will no longer inhibit spend like they did in 2020." Mr Lum concluded.