Small Businesses Continue to Show Decline in Same Store Credit and Debit Card Sales Despite Holiday Push

Capital Access Network, Inc.'s (CAN) Data Services Division released its Q4 2009 Small Business Credit Sales Report (SBCS Report). The report shows that despite a holiday season push, Main Street brick and mortar retailers and restaurants experienced year-over-year card sales declines again in Q4 2009, continuing a downward sales trend that began for restaurants in Q3 2008 and for retailers in Q2 2007. However, the report also shows that the rate of year-over-year decline in card sales decreased from Q3 2009, reversing a trend of accelerating declines in year-over-year sales for the past two years.

"While we are heartened that the rate of year-over-year card sales decline slowed in Q4 2009, the economy continues to punish America's Main Street businesses," said Glenn Goldman, CAN's President and CEO. "We are continually impressed by the resiliency of Main Street's merchants. Most have no doubt adjusted their business models to account for lower card spend in their stores. We look forward to monitoring their progress in 2010."

Key Q4 2009 SBCS Report Highlights

1. Overall, year-over-year Q4 2009 same store credit and debit card sales continue to decline, showing a 12.15% drop from Q4 2008. This reflects a decrease in the rate of decline reported in Q3 2009 versus Q3 2008 results of 14.84%. Q4 2009 was the ninth consecutive quarter in which overall year-over-year same store card sales showed a decline.

2. While all MSAs* have experienced declining same store credit sales, smaller cities continue to show lesser rates of decline than more populous MSAs. Comparing Q4 2009 with Q4 2008, those areas with populations of less than 100,000 and those with between 100,000 and 249,999 reported declines of 8.26% and 6.49%, respectively. Those MSAs with populations between 249,999 and 999,999 and those with populations of more than 1 million reported declines between Q4 2009 and Q4 2008 of 12.15% and 13.54%, respectively.

3. Both Restaurants and Retail (which includes service providers) slowed the rate of year-over-year decline in Q4 2009, with decreases in credit sales of 8.67% and 15.16%, respectively, over Q4 2008 levels. In Q3 2009 compared to Q3 2008, those categories reported declines of 11.06% and 18.46%, respectively.

SPOTLIGHT: Restaurants with an average ticket of less than $25 continue to perform better than more expensive restaurants (Q4 2009 year-over-year decline of 4.29% in card sales). Among $100+ average ticket restaurants, Q4 2009 versus Q4 2008 card sales declined only 8.08% compared to double digit year-over-year quarterly declines ranging from 18.43% to 27.48% for the previous four quarters.

4. In Q4 2009, all regions continued to show a year-over-year quarterly decline in same store credit sales. On a year-over-year basis, the Plains Region dramatically slowed its rate of decline to 2.43% compared to 14.54% in Q3 2009 while the Southwest Region increased its rate of decline to 16.88% compared to 15.92% in Q3 2009.

SPOTLIGHT: Over the past three years, multiple regions (Plains, Southeast and Midwest) have experienced nine quarters of year-over-year decline. Comparatively, the Southwest Region has experienced fewer quarters of year-over-year same store credit sales decline (six quarters), but the last three quarterly drops have been the most severe of the eight regions with 15.77%, 15.92% and 16.88% in Q2 2009, Q3 2009 and Q4 2009 compared to the same quarters in 2008. The Southwest Region's December 2009 compared to December 2008 credit sales were down 19.42%, demonstrating that the downward year-over-year credit sales trend continued and was among the most severe of the eight regions.

* Metropolitan and Micropolitan Statistical Areas as defined by the Office of Management and Budget based on U.S. Census Bureau data.

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