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Q3 2011 Spend Sights Reports Show Contrasting Spending Trends between SectorsData from American Express Business Insights Shows Surge in First Class Airline Tickets, Preference for Economy Lodging and Selective Luxury Retail Spend
NEW YORK,  November 21, 2011 -- 

American Express Business Insights today released its series of Q3 2011 Business Insights Spend Sights reports that reveal a new trend of selective luxury spending among both consumers and businesses, particularly when it comes to air travel and retail fashion. The reports, which examine spending patterns across several key categories, US cities and demographic groups, suggest a willingness among some consumer groups to loosen the reins on spending for select big-ticket items.

"While value remains important to consumers, Q3 spending patterns indicate they consider occasional luxury purchases to be worth the expense," said Ed Jay, Senior Vice President at American Express Business Insights. "Marking a positive sign for merchants, consumers prove willing to spend but selective on where they choose luxury over value."

Based on actual, aggregated spending data between July 1 and September 30, 2011, the Business Insights Spend Sights reports provide a year-over-year comparison of consumer and business spending across sectors such as luxury retail, dining and entertainment, and travel. The latest Business Insights Spend Sights reports provide a snapshot into the analytical capabilities of American Express Business Insights, which helps companies identify trends and changes in spending behavior across a range of industries and consumer groups. By analyzing real spending, businesses can gain perspective into both emerging and sustained trends that impact their industries, and reveal opportunities to reach key customer segments.

Data Highlights

Strong Spending Preferences Emerge as Consumers Do More with Less, Choosing Luxury in the Sky and Value on the Ground While Allowing Themselves the Occasional Big-Ticket Retail Purchase

In an uncertain economic climate, consumers remained cautious as they selected value overall, choosing carefully when to splurge. Airline tickets were among the areas worth indulging in while consumers chose value hotels and limited frequent retail purchases. More specifically:

  • Travel Spend Sights:

    Consumers traveled in style while remaining budget conscious, resulting in disparate spending trends across the airline and lodging industries. First class and business class airline tickets proved worth splurging on across all business and consumer groups. Even average consumers opted for luxury in the sky, increasing spend on first class by 9.6% while decreasing spend on economy tickets. In lodging, however, value proved the key consideration, especially among large businesses, which increased spending on economy lodging by 41.6% and ultra-affluent consumers, who increased spend by 20.2%.
     
  • Luxury Retail Spend Sights:

    Continuing the trend of selective spending, the retail sector saw consumers spend more, less frequently, though they remained cautious overall in their shopping. The jewelry sector was the only retail category to truly "shine" during Q3, with an overall spend increase of 2.4%, the result of a 9.2% uptick in average transaction size offsetting lower transaction volume. Consumers splurged on fashion only on occasion, increasing average transaction size by 11.3% and decreasing average transaction volume by 10.4% to net a 0.3% increase in overall spending.

Shift to Indoor Entertainment Spend in Summer Months; Young Consumers Lead Spend Growth Regionally

  • Dining and Entertainment Spend Sights:

    Consumers chose budget-friendly indoor entertainment more often in Q3, including activities such as billiards, aquariums and bowling. These pursuits experienced an 8.9% overall increase in spend while outdoor entertainment saw spending drop for the same period over last year. In the dining sector, restaurants took a hit in Q3 as consumers decreased spend on fine dining by 5.5% and quick service by 1.3%. Casual dining declined the most, by 8.2%, showing that mid-tier dining establishments have been impacted the most by consumers' preferences for either value or luxury.
     
  • Regional Spend Sights:

    Younger consumers led spending across all five cities studied -- Chicago; Los Angeles; Miami; New York; San Francisco -- in nearly every category, demonstrating the purchase power of this demographic. Most notably, young adult affluents in Los Angeles increased lodging spend by 34% and young adult moderates in San Francisco posted a 24% uptick on home furnishings. Retail shoppers in New York City decreased transaction volume while increasing transaction size, mirroring the national trend of spending on big-ticket fashion items.

The data above and many more insights are included in four new American Express Business Insights Q3 2011 Spend Sights reports, available to media for free download under "Related Items" in the upper-right corner of your screen.

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 www.americanexpress.com/businessinsights.

About the Q3 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.