Visa USA Reports Strong Growth in Sales

For the day, consumer spending on Visa credit cards exceeded $2.1 billion while debit spending grew to more than $1.7 billion, a 10 percent and 21.6 percent spike from this same time in 2003, respectively.

The increase in sales volume for Black Friday was largely driven by a 20.9 percent increase in Discount, Mass Retailers and Drug Store purchases, a 15.7 percent growth in Department and Apparel purchases and a 15.6 percent rise in Home and Garden purchases. Specialty Retail, Gift and Hobby purchases remained relatively flat, although consumers made more total transactions than on Black Friday 2003 and sales growth (on Visa branded cards) since November 1, 2004 has been positive at six percent.

"Based on the sales we witnessed Friday, and the steady growth in Visa volume over the past three weeks, merchants should be feeling more in the holiday spirit than in years past," said Wayne Best, senior vice president for strategic economic analysis for Visa USA. "Consumers aren't procrastinating this year. They began their holiday shopping in early November and hit the malls in force on Black Friday."

Best adds, "Visa is seeing continued growth across a range of retail categories, from discount stores to more discretionary categories like travel and entertainment. This pattern signals consumers are generally comfortable with their financial situation, which bodes well for merchants who have been hoping for a good holiday season. What's also encouraging is that debit transactions are far outpacing credit transactions, as consumers use available funds for their holiday purchases instead of taking on new debt."

Best concludes, "E-commerce growth remains a bright spot this holiday, expanding at nearly 32 percent since November 1, a sign more consumers appreciate the security and convenience of shopping with their Visa cards online. The one area we will continue to watch is Specialty Retail, to see if the sales volume again moves upwards as we expect."

Contrary to popular belief, Black Friday is not the busiest shopping season of the year. Over the last several years, Visa spending on the Saturday before Christmas was 8 to 19 percent higher than the Friday after Thanksgiving.

There are more than 450 million Visa branded credit and debit cards in the United States. Those cards represent over 14 percent of Personal Consumption Expenditures (PCE), indicating that consumers spend more than $14 out of every $100 using a Visa branded card. Only cash and checks have a greater share of PCE, making Visa products a strong indicator of consumer spending behavior.