Canadian consumer spending increased 3.31% during the first quarter, compared to the same period last year, according to Moneris Solutions Corporation, Canada’s largest credit and debit card processor.

Despite this, spending volumes dropped steadily throughout the quarter, with January showing a spending increase of 4.38%, while February and March showed increases of 3.35% and 2.17%, respectively.

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The hotel category saw the highest increase in overall spending of 7.07%, followed by grocery at 6.24% and restaurants at 5.15%. Fast food restaurants continued to fuel the spending growth in the restaurant category, with an increase in dollars spent of 8.75%, compared to the same period in 2012.

According to the Moneris Spending Report, pet owners continued to be especially kind to their animals this quarter, as pet stores and pet foods saw the greatest spend increase within the specialty retail category, at 12.15%. This was followed by sporting goods at 7.96% and florists at 5.20%.

Normally a strong category, apparel saw its spending drop slightly by -0.42% in the first quarter, compared to the same period last year. Within the specialty retail category, book stores experienced a spending decrease of -4.66%, followed closely by cameras & photography at -4.42%.

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With an increase of 7.22%, Alberta led the way in spending growth in Canada, followed by Newfoundland and Labrador at 6.05% and Saskatchewan at 5.93%. Ontario experienced moderate growth in Q1 compared to the same period last year, at 1.99%. At the bottom of the spending pack were New Brunswick, with an increase in spending of 0.12%, followed by Nova Scotia at 0.04% and Prince Edward Island at -0.62%.

Debit card spending (3.78%) continued to outpace credit card spending (2.98%) in the first quarter, compared to the same period last year, which may indicate a heightened awareness among Canadians around the need to reduce household debt.

Nationally, the overall credit to debit ratio was 58.9% to 41.1% while, with Ontario showing the highest credit to debit ratio at 63.1% to 36.9%. Conversely, New Brunswick experienced the lowest credit to debit card ratio (49.1% : 50.9%) followed by Manitoba (at 49.4% : 50.6%).

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