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Q1 Spend Sights Reports Reveal Emerging Restaurant and Lodging Spending Barbell EffectData from American Express Business Insights Reveals Consumer Spend Growth across Retail, Dining and Travel Categories
NEW YORK,  July 15, 2011 -- 

American Express Business Insights today released its series of Q1 2011 Business Insights Spend Sights reports, which analyze spending patterns across an array of categories, US cities and consumer groups. Based on actual, aggregated spending data between January 1 and March 31, 2011, the Business Insights Spend Sights reports provide a year-over-year picture of consumer and business spending across key sectors such as luxury retail, dining and entertainment, and travel.

The latest Business Insights Spend Sights reports highlight the analytical capabilities of American Express Business Insights, which help companies identify spending trends across a range of categories and consumer groups. By analyzing demographic and categorical spending patterns, businesses can gain insight into the longer-term impact emerging trends may have on their industries, and point to new opportunities for identifying their strongest customer segments.

Data Highlights

Low- and High-End Merchants Are Beneficiaries of Emerging Barbell Trend

As consumers and businesses alike continue to seek value in sectors such as dining and lodging, the low and high ends of the merchant spectrum are benefiting from an emerging "barbell" effect. As a result, mid-tier merchants, such as casual restaurants and moderate hotel accommodations, are seeing a less pronounced return to spending to date in 2011. More specifically:

  • Dining and Entertainment Report:
     
  • The restaurant industry continues to see modest increases in spend overall, with an uptick of 1.6% across all consumer groups and dining classes. A "barbell" effect – exhibited by quick service restaurants (QSRs) and fine dining establishments seeing notable increases of 5.2% and 4.2%, respectively, while middle-of-the-road casual dining remains flat – is an emerging trend in the dining category. Entertainment spending is trending upward overall compared to last year, with the most affluent consumers spending 7.3% more and average consumers increasing spend by 5.1%. Performing arts & cinema and golf lead the entertainment category with overall spend increases during Q1 of 3.8% and 2.7%, respectively.
     
  • Travel Report:
     
  • Travel sector spending has been mixed across the airline, car rental, cruise and lodging categories, but consumers, and especially businesses, contributed to spend increases in air travel and hotels in the beginning of the year. During Q1, lodging consumers showed a preference for either value or pampering as economy class spending increased 14.0%, and spending on luxury accommodations rose 7.5%. This barbell trend squeezed out the moderate and upscale categories, which saw much more modest increases of 1.2% and 3.2%, respectively.

Regional Spikes in Housewares and Furniture Spend Doesn't Translate to Sector Overall; Department Stores Reign Supreme in Retail Spend

  • Luxury Retail Report:
     
  • While several US cities spiked in general housewares and furniture spend, overall luxury furniture and home furnishings showed mixed results – and a decrease in spend by consumers of 14.4%. The impact of ultra-affluent consumer dollars is apparent, as cutbacks of 21.7% by this group contributed to the Q1 decline. Department stores, however, fared much more positively with an overall spend increase of 4.2% over the same period last year, likely driven by consumers taking advantage of post-holiday sales.
     
  • Regional Report:
     
  • Across several key US cities, one retail category rose above all others in Q1: housewares and furniture. Los Angeles led Q1 spend in this category at a 39.0% increase over last year. Fashion spending suffered overall, with coast-to-coast decreases in spend by young affluents in Miami (-18.0%) and Los Angeles (-8.0%). In the travel sector, however, San Francisco and New York saw healthy increases in lodging spend, with young adult moderates leading growth by 18.0% and 7.0% in these respective cities.

"Clearly, consumers are showing strong preferences for either value or luxury, and mid-tier merchants and service providers are feeling the squeeze," said Ed Jay, Senior Vice President at American Express Business Insights. "In other categories such as retail and leisure sports, both consumers and businesses are showing promising signs of exerting their growing spending power, and we expect these modest increases to continue to mirror the overall economic recovery."

The data above and many more insights are included in four new American Express Business Insights Q1 2011 Spend Sights reports, available to media for free download at about.americanexpress.com/news.

About American Express Business Insights
As part of the Global Merchant Services organization within American Express Company, American Express Business Insights provides in-depth, actionable insights into consumer and business spending at the business, industry and geographic levels, leveraging proprietary transaction data from the American Express network of approximately 90 million cards in force across over 125 markets.

American Express Business Insights produces in-depth quarterly reports for the Airline, Car Rental, Cruise, Lodging, Restaurant, Entertainment and various Luxury Retail categories, as well as sector-specific geographic reports. These full-length Industry IQ reports are available for purchase at americanexpress.com/businessinsights.

About the Q1 2011 Spend Sights Reports from American Express Business Insights
To identify changing spending habits across various regions, American Express Business Insights examined US consumer and business spending patterns at tens of thousands of merchants. The data shown in the reports are derived from transactions on the American Express payment network projected to reflect the general population in the industry, consumer and business segments shown. The data do not represent American Express's own performance in the industry segments shown and do not represent the spending behavior of American Express Cardmembers overall or in any particular cardmember segment.