FINANCE

MasterCard: Mid-season holiday spending growth slows

BY Katherine Boccaccio

Purchase, N.Y. — A SpendingPulse report released Monday by MasterCard Advisors found that after a three-week recovery of retail spending growth that started two weeks after Superstorm Sandy and lasted through the week ending Dec. 1, a slowdown occurred in the week ending Dec. 8.

After a surge in growth in late November some key sectors such as Specialty Apparel slipped into negative growth in early December, according to the report.

“Given the season’s modest start, the numbers we’re seeing so far are highlighting the importance of the last two weeks of the season,” said Michael McNamara, global solutions leader, MasterCard SpendingPulse. “After a brief recovery in growth rates after Sandy, holiday sector sales growth has again subsided.”

Based on the inconsistent growth patterns during the 2012 season to date, McNamara said the stretch run is even more important than it has been over the last few years and that Super Saturday – the last Saturday before Christmas – “is going to have to live up to its name,” he said.

MasterCard Advisors expects that, based on historical daily patterns, this year retailers should get the benefit of a full Saturday of sales that could rival Black Friday sales levels north of $18 billion.

In 2011, the final 10 days before Christmas generated almost $147 billion in retail sales volume, according to MasterCard Advisors, accounting for nearly 24% of the holiday shopping season (defined as the 50 days before Christmas).

MasterCard SpendingPulse estimated that $18.9 billion was spent on Black Friday this year, a year-over-year decline of 4.9%. However, on Thanksgiving Thursday, $6.2 billion was spent, a much smaller number, but representing a 23% growth rate. When Thursday and Friday are taken together, there was a 2.1% year-over-year growth over the same two days last year. For the four days of Thanksgiving weekend taken together, there was a 2.9% growth rate, $50.2 billion versus $48.8 billion last year. The Specialty Apparel sector did relatively well during this period, growing 3.1% on Black Friday and approximately 15% on Thanksgiving Thursday, albeit off a smaller base.

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FINANCE

Gift card sales to top $110 billion

BY Staff Writer

Boston — A report issued Monday by CEB TowerGroup found that sales of gift cards will surpass $110 billion and spillage will drop 20% to $1.7 billion.

Propelling gift card sales past the $100 billion dollar mark is an increase in open loop gift cards purchases like those offered by American Express, Visa, Mastercard and Discover ($40 billion), restaurant gift cards ($19 billion) and merchant cards ($36 billion).

While electronic gift card sales have increased since tracking began in 2010, sales in 2012 are only projected to reach $3 billion, reflecting slower than initially projected adoption.

In 2012, CEB forecasts that roughly 85% of the U.S. population will exchange gift cards. In addition to a higher volume of card sales, 75% of consumers will spend the full amount of money on the card and 30% will spend $25 more than the value of the card, which is helping lower spillage – the amount of money left on a gift card that a consumer will never spends – to $1.7 billion.

Gift cards rebounded well after two years of slow growth in 2008 and 2009 due to the unforeseen economic downturn, according to the report. CEB TowerGroup estimated that the market will top $130 billion in sales by 2015 with electronic gifting growing from $3 billion in sales (2012) to roughly $16 billion by 2015.

"Consumers continue to flock to gift cards as a popular gift choice due to the variety and assortment of cards available," said CEB TowerGroup senior research director Brian Riley.

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Five-day online spending total surpasses $5 billion

BY Katherine Boccaccio

Reston, Va. — Survey results released Monday by comScore revealed that the most recent work-week saw four individual days eclipse $1 billion in spending, led by Green Monday with $1.275 billion.

comScore, which has monitored holiday season retail e-commerce spending for the first 44 days of the November–December 2012 holiday season, reported that to date $33.8 billion has been spent online, marking a 13% increase versus the corresponding days last year.

"This past workweek saw four days surpass the billion dollar spending threshold during the heaviest five-day online shopping period on record," said comScore chairman Gian Fulgoni. "With this most recent week in the books, the peak spending period may now be in our rear-view-mirror – but the online holiday shopping season is not over yet. We should have one more headline day on Free Shipping Day this Monday the 17th as the procrastinators among us scramble to order gifts in time for Christmas next week … We still expect that the full season will realize a growth rate well north of 13%.”

For the 2012 holiday season-to-date, eleven individual days have surpassed $1 billion in online retail sales, already surpassing last year’s record of 10 shopping days. Cyber Monday (Nov. 26, 2012) currently ranks as the heaviest online spending day of the season – and in history – at $1.465 billion. Tuesday, Dec. 4, 2012 ranks second with $1.362 billion, followed by Monday, Dec. 10, 2012 (Green Monday) with $1.275 billion, Tuesday, Nov. 27, 2012 with $1.263 billion and Monday, Nov. 28, 2011 (Cyber Monday 2011) with $1.251 billion.

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