Not surprisingly in an inflationary era, consumers are shelling out more for essentials including food and fuel. The latest Mastercard SpendingPulse report from the Purchase, N.Y.-based credit card company confirms that rising prices spurred a 14% lift in grocery sales last month compared to a year ago and a 42.1% leap in fuel and convenience sales. On a three-year basis, grocery sales surged 24.8% from pre-pandemic June 2019 to June 2022, while fuel spiked 55.7% in that span.
Overall consumer retail spending in June (excluding automotive) came in 9.5% higher than last summer, again fueled by inflation. When it comes to discretionary spending, people seem to be swiping more for jewelry (up 16.2% from 2021) and travel experiences right now, with airline and lodging both seeing increases, according to Mastercard.
“Sector by sector, we’re seeing a varied picture of how inflation is impacting essential versus discretionary consumer spending,” observed Steve Sadove, senior advisor for Mastercard and former CEO and chairman of Saks Inc. “One notable highlight is that travel sectors such as airlines and lodging continue to show signs of strong demand.”
Meanwhile, as the ripple effects from unrelenting inflation continue across many sectors of business and commerce, Mastercard is responding with new tools and services. Earlier this summer, the company introduced PayPal Business Cashback Mastercard, a card with no annual fee and 2% cashback on all purchases with no limit to the cashback can be earned. The card allows small businesses, including independent grocers and smaller and startup brands and manufacturers, to pay for everyday and unexpected expenses while earning rewards on purchases.
“As small business owners continue to recover from the challenges of the past two years, having multiple financing options to address their capital needs is more important than ever,” said Bernardo Martinez, VP of global merchant lending for San Jose, Calif.-based PayPal. “The PayPal Business Cashback Mastercard provides merchants greater value, more choice and the increased flexibility they need to manage their business finances, offering among the best value available on no annual fee business credit cards today.”