February 1, 2010
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News: Decrease in CC Spending Slowing
Although 4th quarter retail and restaurant debit and credit card sales were down from same time last year, the downward trend has begun to slow down. According to the 2009 Small Business Credit Sales Report (SBCS), 4th quarter debit and credit card sales fell by 12.15 percent from same quarter 2008. The decrease is a moderate change from the 14.84 percent decrease in 3rd quarter 2009 versus 3rd quarter 2008. December was the ninth consecutive quarter that retail and restaurant debit and credit card sales were down. The SBCS Report is published by the Data Services Division of Capital Access Network, Inc. (CAN).
The report showed that 4th quarter debit and credit card sales in larger Metropolitan and Micropolitan Statistical Areas (MSA) with populations between 249,999 and 999,999 decreased 12.15 percent from same time last year. Areas with a population of a million or more experienced a 13.54 percent decrease. Smaller MSA's with a population of less than 100,000 reported a 8.26 percent decreased and the smallest decrease in 4th quarter debit and credit card payments were MSA's of a population between 100,000 and 249,999. Glenn Goldman, CAN's President and CEO said that most restaurants and retailers have modified their business models in order to adjust to the decreasing trend.
Although all regions across the country experienced a decrease in debit and credit sales for 4th quarter, the rate varied from region to region. The Plains Region performed the best with a 2.43 percent rate of decrease; a significant change from the 14.54 percent in 3rd quarter. The Southwest Region had the poorest performance as it decreased card sales by 16.88 percent compared to 15.92 percent in 3rd quarter.
An interesting note in the restaurant category with debit and credit card sales decreasing to 8.67 percent from same time last year showed that restaurants with a lower average ticket fared better than the higher priced dining. Lower ticket restaurants experienced a decline of 4.29 percent while higher priced restaurants 8.08 percent.