Franchise Update Magazine Issue II, 2013 - Page 42

Grow Market Lead Consumer data By Tom Epstein 2012 Sales Performance Review Slow, steady sales growth predicted for 2013 E ach year at Franchise Payments Network (FPN), we look at sales trends in the franchise space. While not encompassing all of franchising, FPN does have real data on our 140-plus franchise system clients. This provides us with a pretty good snapshot of trends in franchising and the economy in general. Baseline retail sales grew between 4.7% and 5.2% in 2012, depending on who you ask. By all accounts, however, the 2012 holiday season was lackluster, with only a 0.5% increase over 2011— the worst showing since 2008. Looking at 2012 as whole, it is my opinion that the presidential election cycle was a huge factor in how the year played out. Looking at our customers and comparing same-store sales year over year, 2012 began very well with some extremely strong sales growth in the first quarter. As we moved closer to the election in the second and third quarters, things slowed quite a bit, with most people delaying certain decisions until they knew who would win the November election. The 2012 holiday sales season also showed some strong sales results early with the Thanksgiving sales weekend. Again, I think the election played a very large role in this. No matter who their candidate was, everyone now knew the results and what direction the country likely would move in for the foreseeable future. But then all the talk of the fiscal cliff and potential new taxes in 2013 dampened this a bit as we ended the year. Let’s look as some of the segments in the franchise space, and how they performed in 2012: 40 Franchiseupdate Iss u e II, 2 0 1 3 Sector 2012 Restaurant +7% Dessert +28% QSR +16% Home Healthcare + 5% Services +9% Salons Flat The great news here is that, for the first time in quite a while, none of the segments we looked at showed a negative number for the year. QSR was the percentage growth leader, driven by the dessert segment (which we broke out into its own category). The dessert space was also the leader in both the number and the percentage of new units opened in 2012. Salons (which includes hair salons, tanning, spa, and massage) With all the options for cloud-based POS systems, loyalty programs that build the brand and drive sales, and the growth of mobile payments, franchise systems that adopt early will be the sales winners in next year’s update. lagged the pack, but the good news here is that a flat year actually represented a nice comeback. I would look for this category to grow in 2013. Transactions on general purchase cards issued in the U.S. totaled $23.96 billion in 2012, up 8.7% from 2011. The average dollar amount of a purchase was $92.86, down 0.3% from 2011. At year-end, there were 536.6 million cards in circulation, up 3.4% from 2011; however, the outstanding balances on those accounts totaled $714.19 billion, up only 0.01% from 2011. One could argue that issuers are finally show