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What happened in April?!

That question is being asked given the huge spike in credit card volume processed when compared to the same time period last year. Wind River’s portfolio of over 3,500 merchants (which processed over $1.5 Billion in volume last year) saw year-over-year sales jump 11.8%! A simple survey of several of our competitors confirms this spike across their merchant base as well. Economists are debating what factors were involved listing weather, economic recovery and a later Easter as possible contributing factors to this large increase. Whatever the reason, it is good news.

In a recent interview, pymts.com spoke with Sr. VP of Market Insights for MasterCard,Sarah Quinlan, to understand what is driving retail spending trends. When asked about this booming increase, Wall Street’s “Duchess of Doom” told us to just look at the weather. In detail,Quinlan responds:

What’s happened is that where people had the abilities to spend, they absolutely wanted to spend. Another important point is that, even with the muted spending that we saw in January, February, and March, we still saw that the leading category was experiential spending. This is where you see people spending on dining out, traveling, and jewelry – things that are discretionary spending as opposed to grocery shopping, or gasoline and things like that. To me, that shows economic confidence. (“Fair Weather Consumer Spending?”)

Testing Quinlan’s theory of experiential spending, we looked at our own portfolio and found our Jewelry stores’ year-over-year volume of credit card sales had increased by only 1.9% January – April. However, our restaurants had experienced above average growth of 12.7% year-over-year for the same time period. Industry reports show that online shopping had also seen double-digit growth year-over-year, but it’s good to note that it still accounts for only 7-8% of total retail spending. So it seems people still like to get off the computer and out to the stores! Is this what you are finding in your business?

To continue our “trends” conversation I blogged about last month, I’m happy to report the overall Wind River portfolio volume growth from January-April of this year was 4.2% over the same time period last year. Most of our clients (57%) shared in this positive credit card growth year-over-year, slightly outweighing the number of clients who have not seen growth yet this year.

If you weren’t part of the 57%, not to worry. Several segments and industries are hanging back by forces out of your direct control, and we also realize that credit card sales are only part of the overall picture of your total sales. At some point we can expect the “rising tide lifts all ships” affect to take hold over your particular situation. In the meantime, we look forward to rolling out a new online reporting package in Q3 that will provide more personalized and specific insight into these volume trends. More details on that in a later blog!

As always, Wind River is committed to bringing our clients more information to allow you to manage your credit card expense line. Let me know if we hit the mark. You can contact me directly at mcourchane@windriverfinancial.com or call our friendly relationship managers at 1-800-704-7253, Option #4.