00:00 Speaker A
Is there any way to know how much this spends in the top third or decile of Americans by income?
00:13 Speaker B
Yes, we are actually working with our partners, uh Affinity and Pixis who help us analyze this uh credit and debit card data. And uh, we’re actually doing some analysis that we’re going to release uh in some time that shows uh spending by decile and you see what higher income families are spending specifically on a year-over-year basis. So all that talk about the K-shaped economy, uh we definitely see that in some of the spending data. There’s almost a straight line when you look at the uh left-hand side, the low-income families and the uh high-income families on the right-hand side in terms of their growth and uh, you know, on a year-to-year basis in all areas.
01:21 Speaker A
Um, and it’s interesting, we’re showing some months, spending by region, although month over year is more interesting than month over year. But with digital products like products up about 15% a year, mismanagement, uh, or I guess improperly adjusted estimates. Um, so, you know, what does that tell you about what people are spending, what kinds of gifts they’re buying?
01:54 Speaker B
Yes, it is definitely worth understanding that digital products are a relatively small category. And it’s uh, you know, uh things like buying video games online or ebooks or anything that’s not physical. Ah, but when we talk to consumers and ask them what they’re buying for the holiday season, the number one answer we get is clothing. Uh, that’s top of the list. And then obviously gift cards and toys. When we talk, we talk to consumers about what they want to get, uh, the number one thing is a gift card. So when people get those gift cards and they go out shopping after Christmas sales, we expect to see really significant spending after Christmas.
02:44 Speaker A
right I mean, buying a gift card recognizes that revenue, right? Not when it’s spent? If I remember correctly, right?
02:53 Speaker B
right yes
02:54 Speaker A
Um and you know, overall when we’re looking at these numbers, and you know, as someone who’s been tracking retail spending for a while, you know, how does it compare? Where do we rank on the spectrum of what spending typically looks like?
03:22 Speaker B
So if we look back, uh, remember that pre-pandemic, uh, you know, during the pandemic we had some pretty uh strong years. Uh so if we throw those out and look at the 10 years pre-pandemic, the average increase for the holiday period was about 3.6%. Uh we’re trending towards uh something along the 4% line. Uh we forecast sales growth between 3.7 and 4.2% for the holiday season. Uh we hope to hit those numbers. That is clearly an upward trend. So, uh again, I think the consumer is the bright spot in this economy right now, right? They’re going out there, they’re spending, uh and even though wages aren’t growing as fast as, you know, you’d hope they would, uh consumers are actually spending more and saving less that they can spend on family and loved ones. One of the trends that we saw during the year is 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.
