Transaction processor First Data Corp. and online-payment service PayPal Inc. are reporting double-digit increases in consumer Black Friday spending this year compared with the same day in 2009, with First Data saying same-store sales returned to prerecession levels.
Aided by aggressive Black Friday marketing campaigns, same-store sales in the United States on the day following Thanksgiving increased 12.3% year over year, while transaction volume rose 10.1%, according to First Data’s SpendTrend report, which tracks consumer spending initiated with credit, signature-debit, PIN-debit and electronic benefits transfer cards. The average purchase size increased by 1.9%.
The Retailer segment experienced a modest 8.6% increase in dollar-volume growth. The largest increase, 12.6%, came from the General Merchandise category that includes value retailers, while the lone category measured that experienced a decrease in spending, 6.7%, was Electronic/Appliances, the SpendTrend report shows.
Despite the overall growth, Black Friday is just one day in the holiday spending season, stresses Silvio Tavares, senior vice president and division manager, First Data information services and analytics.
“The good news is consumers are out there using their cards again, and they are using them at the same level as prior to the recession,” he says.
Many consumers had stopped using their cards, according to TransUnion, which on Nov. 29 reported that 8 million more U.S. cardholders had shelved their bank-issued credit cards, bringing to 40% the percentage of creditworthy consumers who did not use their bankcards within the past 12 months (see story).
Indeed, the economy “still has some challenges,” Tavares says.
For one, the unemployment rate, which is hovering around 10%, is virtually unchanged from a year ago, Tavares notes. “One of the sources of spending is whether you have more jobs, and that hasn’t happened,” he says.
Moreover, consumers increasingly are saving their money instead of spending it, Tavares says.
Since the recession began three years ago, consumers have pumped $1 trillion into bank deposits, representing 92% of their increase in disposable income during that time, according to a news analysis released Nov. 30 from Market Rates Insight, a San Anselmo, Calif.-based provider of financial information to banks and other institutions.
Meanwhile, PayPal, which says it processes 16.5% of U.S. e-commerce and 15% of global e-commerce volume, reported a 27% increase in total Black Friday payment volume, suggesting more consumers are shopping online to find better deals and to avoid waiting in long checkout lines. The unit of eBay Inc. also reported a 310% increase in year-over-year mobile shopping conducted that day.
Neither PayPal nor First Data reported specific spending or transaction totals.
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