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