Melbourne Cup nearly halves consumer spending

An analysis of 1.4 million credit and debit card transactions by the Commonwealth Bank of Australia has uncovered a 10-minute window during the Melbourne Cup race when consumer spending plummets by 42 per cent.

Speaking of “the race that stops the nation’s spending”, Rohan Ritchie, general manager of everyday accounts at CBA, said that the major bank doesn’t usually see events that bring spending to a standstill the way the Melbourne Cup does, but he noted that the steep drop is short-lived, with spending rebounding in the evening when celebrations continue.

Overall spending at the Melbourne Cup, on the other hand, has surged over the last few years, especially at restaurants and on transport, CBA’s analysis found.

According to the major bank, spending increased by 25 per cent in 2017 compared to the 2016 figure, and 62 per cent from 2015 to 2017.

More than $32 million was spent on restaurants and dining out on Melbourne Cup day in 2017, 23 per cent higher than the same day in 2016, while spending on transport (such as taxis and private cars) increased by about 36 per cent in 2017, compared to the previous year.

“The majority of the day’s transactions occur in the lead-up to the race. With most people choosing to spend a half day in the office before heading out to a celebratory lunch, it’s not surprising to see a surge in spend categories like restaurants and transport. This is good news for businesses operating in these industries, as we expect this trend to continue,” Mr Ritchie said.

Commonwealth Bank also found that more than half of the day’s purchases were made using debit cards, suggesting that “Australians are becoming more conscious about their spending habits” and are opting to use their own money, rather than rely on credit cards.

Mr Ritchie said that Melbourne Cup enthusiasts should give themselves a spending limit for the day and activate transaction notifications on their mobile banking app, preventing blowouts, when necessary. 

[Related: APRA tells RC there is ‘a role’ for expense benchmarks]