Capital Access Network Inc.'s (CAN) Data Services Division reports that the nation’s "Main Street" brick-and-mortar retailers and service providers experienced a 3.09% decline in same store credit and signature debit card sales in Q1 2011 as compared to Q1 2010.
The findings were released today in CAN’s Q1 2011 Small Business Credit Sales Report. The Q1 2011 drop marks the 14th consecutive quarter of year-over-year credit and signature debit card sales declines and marks a reversal of a five-quarter trend of moderating YoY declines.
"Restaurants are a bright spot in the credit sales trends," says Glenn Goldman, CAN’s CEO and president. "While Main Street card sales continue to struggle overall, for the first time in 16 quarters, we saw every restaurant ticket size category increase its [year-over-year] card sales. Our nation’s eateries were benefited by Valentine’s Day card spending, which increased almost 1% from the 2010 Valentine’s Day period."
Positive card usage was also found in “A” – risk level businesses, as designated by CAN’s risk-scoring models. "Main Street businesses also continue to hold onto a larger proportion of the available consumer revolving credit," says Goldman.
Despite these pockets of positive card sales, declines were reported in suburban, rural and urban populations, every “Time in Business” category and all eight regions of the country.
A copy of the Q1 2011 SBCS Report can be viewed at: http://www.capitalaccessnetwork.com/sbcsreport.html. Some key points follow:
1. Overall, “Main Street” Q1 2011 same store credit and signature debit card sales declined 3.09% from their Q1 2010 levels. This represents the 14th consecutive quarter of same store year-over-year card sales declines. In total, Main Street restaurants, retailers and service providers have not seen an increase in year-over-year card sales since Q3 2007.
For the first time in five quarters, the rate of year-over-year decline also accelerated in Q1 2011, rising to 3.09% from the 2.56% YoY decline experienced in Q4 2010. For each quarter from Q4 2009 through Q1 2011, same store year-over-year credit sales declines were 12.21%, 9.16%, 5.60%, 5.06%, 2.56% and 3.09%, respectively.
Main Street businesses are holding onto a greater share of the declining consumer credit card float nationwide. According to the Federal Reserve’s April 7, 2011 G.19 Release (see story), revolving consumer debt fell 5.9% in January and a further 4.1% decline is projected for February. At the same time, year-over-year card sales in January fell only 3.73% and then another 0.33% in February.
2. Main Street restaurants increased year-over-year card sales 0.81% in Q1 2011, the second consecutive quarter of year-over-year card sales gains for the nation’s eating places. However, the increase was not enough to offset the non-restaurant (retail, service and other) year-over-year card sales decline of 6.04% in Q1 2011. Main Street retailers, service providers and other stores have experienced same store year-over-year declines in card sales for 16 consecutive quarters dating back to Q2 2007.
Every restaurant category saw increased card spend in Q1 2011 as compared to Q1 2010. "Fine dining" (average tickets greater than $100) reported card sales growth of 0.06% on a year-over-year basis, followed by restaurants with average ticket sizes less than $25, which saw a 0.46% increase; restaurants with average ticket sizes between $25 and $50, which saw a 0.75% increase; and restaurants with average ticket sizes between $50 and $100, which experienced a 1.54% increase. The last time all categories showed same store year-over-year increases in card sales was Q2 2007.
3. During the Valentine’s Day period, defined as February 11-15, restaurants showed a year-over-year card sales increase of 0.99% compared to the 2010 Valentine’s Day period. This uptick helped drive the February restaurant numbers overall. For all restaurants, February 2011 saw same store card sales increase 2.82% compared to the February 2010 levels.
4. Consumers in more rural areas of the country (MSA population less than 100,000) and those in larger urban areas of the country (MSA population 1+ million) are slowing their credit and signature debt purchases more rapidly than their suburban counterparts (MSA populations 100,000-249,000 and 250,000-999,999).
In Q1 2011, year-over-year card sales fell 2.10% and 2.70%, respectively, in areas with populations between 100,000 and 249,999 and those with populations between 250,000 and 999,999. Rural MSAs saw credit sales decline 3.98% and larger urban MSAs declines of 3.50% in Q1 2011 as compared to Q1 2010. This is the third consecutive quarter that both rural and larger urban MSAs have reported larger declines than the other MSA groups.
5. All regions posted card sales declines in Q1 2011 as compared to Q1 2010. Relative credit and signature debit usage continued to be strongest in New England for the fourth straight quarter. New England year-over-year card sales were essentially flat in Q1 2011, declining only 0.12%. The Rocky Mountain Region and Southeast Region reported the severest YoY card sales declines of 4.01% and 4.22% respectively.
6. All “Time in Business” categories again posted year-over-year card sales declines in Q1 2011, ranging from a 0.50% decline for Main Street businesses in operation less than five years to a 4.61% decline for businesses in operation five to seven years. This is the first time since Q1 2009 that the newest businesses (less than five years in business) have had year-over-year same store credit sales figures stronger – on a relative basis – than their more experienced counterparts.
7. Card sales grew for the fourth consecutive quarter among CAN’s “A” businesses (those considered to represent the lowest risk band on an “A”-“D” scale). “A” risk businesses saw card sales increase 2.41% in Q1 2011 from Q1 2010 levels. “B” risk businesses saw Q1 2011 card sales decline 3.04%, “C” risk businesses experienced a 4.52% decline, and “D” risk concerns lost 11.24% of their card sales – in each case compared to Q1 2010 card sales levels.
