Card sales' decline no longer accelerating

According to a study published in February 2010 by analytics firm Capital Access Network Inc., brick-and-mortar retail stores and restaurants experienced a sales decline in the fourth quarter of 2009 compared to the same period in 2008. However, CAN's Q4 2009 Small Business Credit Report found the rate of decline decreased from the third quarter of 2009. This indicates that a two-year trend of accelerating sales volume declines may be reversing.

Highlights from the report include:

• Overall, fourth-quarter 2009, same-store credit and debit card sales showed a 12.15 percent drop from the fourth quarter of 2008. This reflects a decrease from the 14.84 percent decline reported in the third quarter of 2009 versus third-quarter 2008.
• Both restaurants and retail stores (including service providers such as hair salons and spas, automotive repair shops, physicians, plumbers and electricians, among others) slowed the rate of year-over-year decline in the fourth quarter of 2009.
• While all geographic areas experienced declining sales, smaller cities continue to show lower rates of decline than more populated regions.
• While high-end restaurants saw quarterly declines in card sales ranging from 18.43 percent to 27.48 percent from the fourth quarter 2008 to the third quarter of 2009, fourth-quarter 2009 card sales showed a decline of only 8.08 percent.

Sales and forecast nitty-gritty

Mark Lorimer, CAN's Chief Marketing Officer, said CAN's report features analysis of credit and debit card sales trends drawn from data on more than 50,000 U.S. brick-and-mortar businesses; those businesses average approximately $785,000 in annual gross sales and $24,000 in average monthly card processing volume. They also represent approximately 385 Standard Industrial Classification codes.

"This is the first quarter in two years that shows a slowing rate of year-over-year card sales decline," Lorimer said. "Of course, two data points don't make a trend, but it certainly provides a sign that card sales for the nation's small businesses may be turning around.

"But the information provided in the SBCS report is dissected in a variety of ways, allowing us to see more granular trends that could be of use to ISOs, sales agents and processors in their sales and forecasting efforts."

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