Capital Access Network Reports Another Decrease in Main Street YoY Card Sales

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Quick serve restaurant card sales jump; clothing card sales decline.

Capital Access Network, Inc.'s (CAN) Data Services Division’s Small Business Credit Sales (SBCS) Report indicates that Main Street businesses showed a 2.9 percent decline in Q3 2011 card sales compared to Q3 2010 levels. This sixteenth consecutive quarter of decline affects most monitored segments, highlighted only by a few areas of increased card sales.

The largest jump in card sales was demonstrated by restaurants with average tickets less than $25, which rose 4.9 percent in Q3 2011 compared to Q3 2010 sales – the fifth consecutive YoY (year-over-year) card sales increase. Restaurants with average tickets of $50 to $100 followed with a 1.6 percent increase, while restaurants in general increased their card sales by 1.0 percent. Other areas of YoY positive card sales increases were found in MSAs* with a population between 100,000 and 249,999 (2.1 percent increase) and the Great Lakes region (0.8 percent increase).

While restaurants demonstrated some increases, retail and service providers reported a 6.0 percent decline in Q3 2011 versus Q3 2010 card sales, the eighteenth straight quarter of YoY decline. When compared to the Federal Reserve’s October 2011 G19 Release, this quarter’s SBCS Report results suggest that for the past two quarters, most independent restaurants, retailers and service providers have been struggling to hold on to their share of the available consumer credit card float nationwide.

Clothing sales, highlighted for the “back to school period” beginning in July, dipped 5.9 percent in Q3 2011. These numbers are a departure from the Census Bureau’s Monthly and Annual Retail Sales Time Data Series, indicating that “big box” retailers are benefiting from increased consumer spend in this area.

"This quarterly report offers encouraging data for the restaurant industry, which is demonstrating an aggregate uplift in card sales. Less expensive restaurants are the highlight, the only sector in our report with five consecutive quarters of year-over-year card sales,” states Glenn Goldman, CEO of Capital Access Network, Inc. “On the other hand, retail and service industries continue to be challenged by YoY declining card sales dating back to Q2 2007.”

The findings were released today in CAN's Q3 2011 Small Business Credit Sales Report (SBCS Report) and are available at http://www.capitalaccessnetwork.com/sbcsreport.html.

Key findings of the report include:

1. Same store credit and signature debit card sales at “Main Street” businesses declined 2.9 percent in Q3 2011 compared to Q3 2010 levels.    The YoY decline represented the 16th consecutive quarter of falling card sales for Main Street businesses.    

For the past six months, independent restaurants, retailers and service providers have been struggling to hold their share of the available consumer credit card float nationwide. In Q1 2011, YoY card sales for Main Street businesses fell 3.1 percent while revolving credit overall dropped by 3.7 percent indicating that Main Street was holding onto its share of available credit utilization. In Q2 2011, Main Street lost share, with the Federal Reserve reporting that revolving consumer debt rose 1.5 percent while YoY card sales on Main Street fell 3.4 percent. Early indications are that Main Street recovered its share of card sales in Q3 2011, with the Federal Reserve projecting a revolving credit drop of 5.4 percent in July, and another 3.4 percent in August. The July and August figures included in the reported 2.9 percent overall decline in this Small Business Credit Sales Report show Main Street YoY card sales falling 4.6 percent and 2.9 percent, respectively. (All Fed. Figures taken from the Federal Reserve’s October 7, 2011 G.19 Release (Consumer Credit).)

2. Main Street restaurants are showing a sustained increase. YoY card sales in this industry showed a small increase in Q3 2011. Card sales at Main Street restaurants increased 1.0 percent in Q3 2011, following on increases of 0.1 percent, 0.8 percent and 1.8 percent in the prior three quarters. Retail and service providers reported a 6.0 percent decline in Q3 2011 card sales versus Q3 2010 card levels – the eighteenth straight quarter of YoY decline.

Card sales jump at less expensive restaurants – again. Restaurants with average ticket sizes less than $25 saw card sales rise 4.9 percent in Q3 2011 compared to Q3 2010 levels. This is the fifth straight quarter of YoY increases for this group, and the 4.9 percent increase was the largest jump reported for this group since Q3 2008. In contrast, “Fine Dining” establishments (those with average ticket sizes greater than $100) saw a 6.6 percent decline in YoY card sales in Q3 2011. Restaurants with ticket sizes between $25 and $50 experienced a slight 0.1 percent decline in YoY card sales while those with ticket sizes between $50 and $100 saw YoY card sales rise by 1.6 percent.

3. Smaller, suburban MSAs showed a more marked YoY increase in card sales, while counterparts continue to demonstrate declines. Q3 2011 card sales increased 2.1 percent in MSAs with populations between 100,000 and 249,999, the second consecutive quarter of YoY card sales growth for this sector. Rural MSAs (population less than 100,000) saw a Q3 2011 decline in YoY card sales of 2.6 percent, YoY card sales in MSAs with populations of 250,000 to 999,999 declined 4.8 percent, while in MSAs with populations of 1+ million YoY card sales were off by 2.7 percent.

4. Again, seven of eight regions continued to show declines in YoY same store card sales, as regions jockey in rankings. The Great Lakes region reported YoY card sales growth of 0.8 percent. The other regions posted declines between 0.2 percent (Southwest) and 5.1 percent (Rocky Mountain).

5. Businesses open less than 5 years took a hit in YoY card sales, declining 6.4 percent in Q3 2011, reversing the previous quarter’s increase. YoY declines of between 1.8 percent and 3.3 percent were posted across all other “Time in Business” categories. Businesses with the most longevity (15+ years) declined 3.3 percent. Those in the 5-to-7 year and 10-to-15 year categories saw YoY declines of 1.9 percent and 2.1 percent, respectively, compared to the larger 4.5 percent and 3.9 percent YoY declines they experienced in Q2 2011.

6. Men and women-owned businesses lost card sales compared to same quarter last year. Men-owned businesses’ YoY card sales declined 1.8 percent in Q3 2011, less than the YoY decline of 3.1 percent they posted in Q2 2011. Women-owned businesses’ YoY card sales declined 2.4 percent in Q3 2011 compared to a YoY decline of 1.2 percent in Q2 2011.

7. Card sales in clothing stores declined from last year’s levels. Main Street clothiers traditionally see their “back to school” sales bump in Q3. This year, the bump did not appear at their card processing terminals. Q3 2011 card sales decreased 5.9 percent compared to Q2 2010 levels, coming off of a Q2 2011 dip of 0.9 percent and a Q1 2011 increase of 2.0 percent. According to the Census Bureau’s Monthly and Annual Retail Sales Time Data Series, retail sales at clothing stores saw YoY increases every month of the Q2-Q3 2011 observation period. “Big box” retailers may be seeing the lion’s share of the clothing sales increases.    

*Metropolitan and Micropolitan Statistical Areas as defined by the Office of Management and Budget based on U.S. Census Bureau data.

About Small Business Credit Sales (SBCS) Report
The Small Business Credit Sales (SBCS) Report is a quarterly report highlighting credit and signature debit card sales trends within small to mid-sized businesses (SMBs) nationwide. Sponsored by the Data Services Division of Capital Access Network, Inc. (CAN), a New York-based financial technology company, the SBCS Report features analysis of credit and debit card sales trends based on same store card sales data housed in CAN’s data warehouses, which retain 12 years of data and include more than 50,000 businesses and the “daily” card sales data collected from more than 80,000 working capital transactions. Most same store sales retail reports focus on or include data from big-box retail and nationwide/regional department stores, either ignoring or obscuring the trends of the majority of SMBs. The SBCS Report was designed to assist business owners, the processing industry, associations, analysts and media interested in tracking and benchmarking credit and debit card sales trends among SMBs. Data published may include:

  • Average Same Store Credit Sales - Overall
  • Average Same Store Credit Sales - by Population Size
  • Average Same Store Credit Sales - by Industry and Ticket Size
  • Average Same Store Credit Sales - by Geographic Region
  • Average Same Store Credit Sales - by Time in Business
  • Average Same Store Credit Sales - by Risk Category
  • Average Same Store Credit Sales - by Gender of Owner

To receive the quarterly reports automatically via email, interested parties can sign up at
http://www.capitalaccessnetwork.com/sbcsreport.html, or simply send an email to dnaczi(at)CapitalAccessNetwork(dot)com.

About Capital Access Network, Inc.
Capital Access Network, Inc. (CAN) leverages leading edge data, systems and technology, combined with a unique and highly effective Daily Remittance Platform ™, to deliver innovative financial products and services geared to small and mid-sized businesses (SMBs) and SMB capital providers. The Financial Technologies Group (FinTech Group) offers SMB lenders, credit card issuers and other capital providers customized platforms and hosted services that enable Daily Remittance-powered financial products, improving underwriting decisioning and delivery, extending customer lifecycles, controlling costs and enhancing portfolio performance. The Data Services Division draws upon the data gathered by CAN’s subsidiaries through more than a decade of collecting and analyzing the sales trends and firmographics of tens of thousands of SMBs. CAN also provides merchant capital options powered by its Daily Remittance Platform through its wholly-owned subsidiaries: AdvanceMe, Inc, http://www.AdvanceMe.com, the leader in Merchant Cash Advances, and NewLogic Business Loans, Inc., http://www.NewLogicBusinessLoans.com. Headquartered in New York, CAN and its subsidiaries currently employ 390 people in four locations in New York, Georgia, Massachusetts and Costa Rica. Learn more at http://www.CapitalAccessNetwork.com.

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Diane Naczi

Carrie Crabill
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