Consumers Using Available Credit At Restaurants

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Capital Access Network Releases Results from its Q1 2012 Small Business Credit Sales Report Restaurant Sector Shows Significant Positive YoY Card Sales, Valentine’s Day Sweetened Sales

Capital Access Network, Inc.’s (CAN) Data Services Division today released its Q1 2012 Small Business Credit Sales Report (SBCS Report). The SBCS Report shows that consumers chose to use their available credit at restaurants, which continue to show significant positive year-over-year (YoY) card sales. Q1 2012 marks the sixth consecutive quarter of positive YoY restaurant card sales, recording a 4.4 percent rise. This is the highest YoY increase in this category since the report began tracking sales in Q1 2007.

Small businesses began 2012 with a Q1 YoY card sales decline for the eighteenth straight quarter. However, the rate of decline decreased for the third straight quarter, and at 0.7 percent was the lowest reported decline since Q1 2008. According to The Federal Reserve’s April, 2012 G 19 Release, consumer revolving credit availability decreased on a month-over-month basis in January 2012 (-4.4 percent), and is projected to have increased slightly in February 2012 to -3.3 percent. In contrast, Main Street YoY card sales declined only 0.6 percent in January 2012, and increased 1.62 percent in February 2012.

“We see several notable increases in this report. But most impressive is the sustained improvement that has occurred in restaurant card sales. Consumers increased their use of credit cards on dining compared to this time last year. And, the trend has continued for a few quarters, with an unprecedented leap during first quarter of this year to a level not seen since we began tracking for the report. Even though it appears that consumer credit is down, available dollars are being spent dining," stated Glenn Goldman, CAN's CEO and President. “Restaurants with smaller average ticket sizes benefited the most, but it appears that Valentine’s Day may have stimulated card sales of the category. And while non-restaurant businesses are not yet seeing positive YoY card sales, this quarter’s 4.1 percent rate of decline is the smallest decrease reported since Q2 2008.”

A copy of the Q1 2012 SBCS Report can be viewed at: http://www.capitalaccessnetwork.com/sbcsreport.html.

Key Q1 2012 SBCS Report Highlights:
1.    Small businesses began 2012 with a Q1 year-over-year (YoY) card sales decline for the eighteenth straight quarter. However, the rate of decline decreased for the third straight quarter, and at 0.7% was the lowest reported decline since Q1 2008.
SPOTLIGHT: The Federal Reserve’s April, 2012 G 19 Release (Consumer Credit) indicates that consumer revolving credit availability decreased on a month-over- month basis in January 2012 (-4.4%), and is projected to have increased slightly in February 2012 (-3.3%). In contrast, Main Street YoY card sales declined only 0.6% in January 2012, and increased 1.62% in February 2012. This information evidences a renewed decision by consumers to use their available credit to make purchases on Main Street versus at larger or online businesses.
2.    Consumers are choosing to use their available credit at restaurants, which continue to show significant, positive YoY card sales. Q1 2012 marks the sixth consecutive quarter of positive YoY restaurant card sales, recording a 4.4% rise. This is the highest YoY increase in this category since this report began tracking sales in Q1 2007.
    While non-restaurant businesses such as retailers and service providers have not yet benefited from positive YoY card sales, the decline in their YoY card sales slowed to 4.1%. Previous YoY declines reported during the last three quarters of 2011 were in the mid-5% range. Of note is Q1 2012’s decline of 4.1%, the smallest decrease reported since Q2 2008 when the retailer/service segment reported a YoY card sales decline of 3.6%.
3.    Every category of “average ticket size” within the restaurant segment reported positive Q1 2012 YoY card sales, and the gains occurred for the second consecutive quarter. Restaurants with smaller average ticket sizes are benefiting the most, led by establishments with average ticket sizes less than $25. These restaurants increased their YoY card sales by an impressive 7.3%, the highest YoY card sales increase since Q3 2007’s YoY increase of 11.1%. Restaurants with ticket sizes of $25 to $50 followed with a YoY card sales increase of 3.6%, the largest increase for that segment since this report began tracking YoY same store card sales in Q1 2007. The remaining restaurant categories, with ticket sizes between $50 and $100 and with ticket sizes greater than $100, also showed increases of 1.9% and 4.2% respectively. However, these YoY increases did not exceed those reported in Q4 2011.
SPOTLIGHT: February 2012, which included Valentine’s Day-related sales, was a particularly strong month for restaurants, with an uptick in YoY sales across the board. Restaurants with ticket sizes less than $25 and those with tickets sizes greater than $100 each increased their YoY card sales by more than 10%. Restaurants with a ticket size of $25 to $50 increased February YoY sales 5.3%, while restaurants with a ticket size of $50 to $100 increased 3.3%, compared to Q1 2011.
4.    Larger cities and metropolitan areas (MSAs) continued their struggle to move into positive YoY card sales territory. Although the rate of decline slowed to 3.1% and 0.7% for population sizes of 250,000 to 999,999 and greater than 1 million, respectively, neither has achieved the positive YoY card sales demonstrated by smaller cities towns and rural areas. MSAs with populations of less than 100,000 reported increased YoY card sales of 2.6%, the second consecutive increase. Additionally, areas with population sizes of 100,000 to 249,999 once again reported positive YoY card sales results (1%) after reporting a decline in Q4 2011 versus Q4 2010 results.
5.    For the first time since Q2 2010, two regions reported positive YoY card sales this reporting period. The Plains Region and Southeast Regions jumped 5.9% and 0.5% respectively, compared to Q1 2011. The Rocky Mountain Region continues to underperform with a 6.2% YoY decline, the largest reported decline of the eight regions for this quarter, as well as the two previous quarters. The remaining five regions reported YoY card sales declines between 0.1% and 2.7%.
6. All “Time in Business” (TIB) categories continue to follow a similar trajectory, as they have for several quarters. However, businesses that have been operating between seven and 10 years reported positive YoY card sales of 0.5% for the first time since Q4 2007. All other categories reported a slowing decline in YoY card sales. Businesses with TIB of 15 years or greater declined the least (0.34%) while business with TIB of 10 to 15 years declined the most (1.86%).
*Metropolitan and Micropolitan Statistical Areas as defined by the Office of Management and Budget based on U.S. Census Bureau data.

About the CAN Small Business Credit Sales 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 14 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.

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@CapitalAccessNetwork.com.

About Capital Access Network, Inc.
Capital Access Network, Inc. (CAN) is the leading provider of next generation “Daily Remittance” powered financial products and services for small to mid-sized brick and mortar and online businesses in the U.S., through its subsidiaries, and to SMB capital providers internationally. Daily Remittance financial products combine behavioral risk scoring and data driven risk management to enable the delivery of more capital to the right small businesses while decreasing provider risk. CAN and its subsidiaries offer transaction request and fulfillment capabilities through multiple channel options which can be white-labeled or co-branded, including online applications and unique web-based social resources, tools, data and information. Learn more at http://www.CapitalAccessNetwork.com, http://www.AdvanceMe.com and http://www.NewLogicBusinessLoans.com.

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Diane Naczi

Carrie Crabill
For Capital Access Network
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