00:00 Speaker A
Is there a way to know how much of this spending is represented by the top third or even decile of Americans by income?
00:13 Speaker B
Yeah, we’ve actually been working with uh, with our partners, uh Affinity and Pixis who uh help us analyze this credit and debit card data uh. and uh, we’ve actually been doing some analysis that we’re going to release uh in a little while that shows uh spending by decile and you absolutely see higher income households drive spending up in particular on a year-over-year basis. So that all that talk about the uh the K-shaped economy, uh we absolutely see that in some of the spending data. There’s almost a straight line when you look at uh on the left side, lower income households and on the right side uh higher income households in terms of their growth and spending on uh, you know, across all sectors on a year-over-year basis.
01:21 Speaker A
Um, and it’s interesting, we’re showing a little bit of the month some of the um, spending by sector, although probably year over year is more interesting than month over month. But like digital products products up almost 15% year after year, not adjusted, uh, or I guess adjusted not season. Um, so, you know, what’s that telling you about what people are spending, what kind of gifts they’re buying?
01:54 Speaker B
Yes, it is definitely worth understanding that digital products is a relatively small category. and it’s things like uh, you know, uh buy uh video games online or or ebooks or something that that’s not physical. Uh, but when we talk to consumers and ask them what they’re shopping for uh, for the holiday season, the number one answer we’re getting is clothing. Uh, that’s top of the list. And then of course gift cards and toys. When we talk about, we talk to consumers about what they want to receive, uh, number one is a gift card. So uh we expect to actually see significant spending after Christmas when when people take those gift cards and go out uh and shop for the after Christmas sales.
02:44 Speaker A
Right I mean, that income though is recognized when the gift card is purchased, right? Not when it’s spent? If I remember correctly, right?
02:53 Speaker B
Correct it. Yes.
02:54 Speaker A
Um and you know, so overall when we’re looking at these numbers, and you, you know, as someone who’s been tracking retail spending for a while, you know, how do you compare that? Where are we kind of um in the spectrum of what spending typically looks like?
03:22 Speaker B
So if we look back, uh so remember that before the pandemic, uh, you know, during the pandemic we had some pretty uh healthy years. Uh so if we put those aside and look at the 10 years before the pandemic, the average growth for the holiday period was about 3.6%. Uh we’re trending towards uh something along the lines of 4%. Uh we predicted uh sales growth between 3.7 and 4.2% for the holiday season. Uh we expect to probably reach those numbers. This is obviously above trend growth. So, uh again, I think the consumer right now is the strong point in this economy, right? They’re going out there, they’re spending, uh and even if wages aren’t going up as fast as uh, you know, you hope that they would, uh consumers actually spend more and save less to make sure that uh they can spend on uh family and loved ones. The one trend that we saw throughout the year is that for every single event where, you know, consumers were spending on family and loved ones, if you think about Mother’s Day, Father’s Day, Valentine’s Day, back to school. We have seen record or near record spending. So there’s almost uh, you know, consumers are protecting spending on family and loved ones during these events.