First Data: Card spending growth robust in October
Atlanta — Hurricane Sandy impacted spending in the Northeast, according to First Data’s most recent SpendTrend report, which analyzed date for the full month of October 2012 compared with October 2011. SpendTrend tracks same-store consumer spending by credit, signature debit, PIN debit, EBT, closed-loop prepaid cards and checks at U.S. merchant locations.
The October report found that despite political uncertainty (data was compiled prior to the election) and the looming fiscal cliff, consumer spending was healthy in October. For the first time since July, credit dollar volume grew faster than PIN and Signature debit. Credit dollar volume growth was 8.9%, a healthy uptick compared with 2.3% last month. The slower growth in debit was largely driven by restrained spending in categories such as general merchandise stores where debit cards are the typical payment method.
“Consumers appear to be in a favorable spending mood heading into the holiday season due to recovering housing prices, slight job gains and modest income growth which has buoyed consumer confidence,” said Rikard Bandebo, VP and economist, First Data. “However, consumers are also reducing their savings to support spend which suggests that current growth rate will not be sustainable in the long term without substantial improvement in the economy.”
In other findings:
• Dollar volume growth of 6.7% in October was healthy as shoppers became less pessimistic about the economy. Improved consumer sentiment and a pullback in savings continued to support spend. Meanwhile, transaction growth slipped to 5.9% in October compared with 6.3% in September.
• Average ticket growth was 0.8% in October, a reversal from September’s -0.5% growth. Several retail categories experienced improved average tickets due to a slight rise in prices.
• Several segments in the Northeast, such as retailers and food and beverage stores, saw a surge in business late in the month as consumers stocked up on supplies and prepared for the storm. However, during Hurricane Sandy’s landfall and shortly after sales were negatively disrupted across most segments as power outages kept shoppers at home.
“In spite of the uncertainty surrounding the economy and Hurricane Sandy, consumer spending growth continues very much in line with the level of growth we have seen over the last six to seven months.
Several segments in the Northeast, such as Building Material & Garden Equipment & Supply Dealers and Food/Beverage Stores saw a surge in business late in the month as consumers stocked up on supplies and prepared for the storm. However, during Sandy’s landfall and shortly after sales were negatively disrupted across most segments as power outages kept shoppers at home.
Sam’s restores sanity to Black Friday
Sam’s Club’s decision to open at 7 a.m. on Black Friday is a definite "swim upstream" move on the part of the warehouse club operator given retail industry trends and Walmart’s decision to offer its Black Friday deals on Thanksgiving.
"Swim upstream," is one of those references to Walmart culture that basically means doing the opposite of your competitors. So when Sam’s said it wouldn’t open until 7 a.m. the reaction was one of shock because for the past decade retailers have sought to trump one another with earlier and earlier opening hours. At some point it was inevitable that the boundaries of Black Friday would give way and merge into Thanksgiving which is what happened last year and this year. Not at Sam’s.
"Our members pay a fee to shop in our clubs, so they expect a sensible, hassle-free holiday shopping experience alongside an exciting assortment of gifts at great prices. At Sam’s Club, they’ll find free breakfast, hot coffee and award-winning member service," said Sam’s EVP of operations Todd Harbaugh. "The Black Friday shopping experience is our annual ‘thank you’ to members, providing access to extraordinary prices, quality brands our members trust like Samsung, Dyson, and Vizio, and the assortment of gifts to bring cheer to all of our members’ family and friends."
What a novel idea. At many retailers Black Friday is a grueling, unpleasant experience bubbling with hostility. In other words, pretty much the opposite of the romanticized notion of how many folks think Christmas should be. Besides, 7 a.m. is plenty early and Sam’s won’t be leaving money on the table because it didn’t open earlier or follow Walmart’s lead.
That’s because many shoppers approach Black Friday with the precision of a military exercise so if they are going to go to Sam’s there will be specific items on their list and they will have optimized the routing of store visits based on opening hours and items desired. Understanding this list-making behavior, Sam’s has already published its Black Friday deals and it is leveraging technology. Mobile shoppers can access Black Friday deals on-the-go through Sam’s mobile app with new updates that include a holiday giftfinder and "how-to" videos and photo guides to tree trimming and home decor. Members can also upload special holiday photos directly from their smartphone to the Sam’s Club Photo Center.
After shoppers have endured the pre-dawn lunacy at other retail outlets they can hit their local Sam’s for a dose of sanity, free breakfast and Starbucks coffee. Or if they choose to sleep in, Cyberweek promotions kick in November 24 through December 2.
OfficeMax expands Black Friday Everyday promo
Black Friday can be so limiting which is why OfficeMax is expanding a program it offered last year involving special deal pricing every Friday until mid December.
The promotion, which began November 9 and will run through December 14, involves the unveiling of a special holiday deal on a select product at OfficeMax.com that is available for one day only. In addition to driving sales, the company is leveraging the promotional tactic as a means to build its customer database since shoppers are being encouraged to sign up to receive alerts announcing the deals. The first deal offered was a Zeal II Task Chair for $49.99, normally $99.99, and it was available in-store and at OfficeMax.com.
"Following last year’s success, we’re excited to make Black Friday Every Friday bigger than ever this year by enabling shoppers to take advantage of these great savings," said Ronald Lalla, EVP andchief merchandising officer atOfficeMax. "OfficeMax is making it convenient and easy for shoppers to save big early and often on holiday gifts and more throughout the season."