2006 Holiday Retail Sales to Rise 5%

Total holiday retail sales are expected to increase this year but at a slower pace than 2005. The figure is expected to hit $457.4 billion a 5% increase over last year. The National Retail Federation says holiday sales in 2005 rose 6.1%. Over the last ten years, the average percentage increase in sales for the holiday season is 4.6%. One-fifth of retail industry sales occur during the holiday season. Total retail sales for 2005 was $2.2 trillion. Holiday sales account for more than 32% of jewelry store annual sales and 24% of department store annual sales. If gas prices continue to fall holiday sales this year could pick up. The NRF represents more than 1.4 million U.S. retail establishments.

HOLIDAY RETAIL SALES
2000: $352.2 billion
2001: $364.1 billion
2002: $368.8 billion
2003: $387.2 billion
2004: $410.5 billion
2005: $435.6 billion
2006: $457.4 billion
Source: National Retail Federation

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Credit Card Debt Shrinks for the 4th Month

New borrowing on credit cards contracted for the fourth consecutive month, dipping by nearly GBP 400 million in August. For the first half of this year the average monthly contraction is running about GBP 143 million. Revised figures show new credit card lending decreased by GBP 77 million in July. The British Bankers Association reports that total new borrowing on credit cards hit GBP 5.943 billion in August.
Consumer credit fell by GBP 213 million overall while personal loans and
overdrafts rose by a weak GBP 18 million compared with July’s rise of GBP 368 million. The BBA collects data from Abbey National, Alliance & Leicester, Barclays, Bradford & Bingley, HBOS, HSBC Bank, Lloyds TSB, Northern Rock and The Royal Bank of Scotland.

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U.K. Card Charge-Offs Hit 7% in Q2

While credit card charge-offs are slowing rising again in the U.S. they are soaring in the U.K. Charge-offs for credit card-backed bonds in the U.K. hit a record 7.0% in the second quarter, compared to 4.5% one-year ago and 6.6% for the prior quarter. Delinquencies also edged upward during 2Q/06 to 3.8% compared to 3.7% in the first quarter. According to FitchRatings, increases in bankruptcies and individual voluntary arrangements continued to strongly influence the rising charge-off numbers. To tackle the issue of bankruptcies and IVAs, some originators are considering reviewing their underwriting policies, enhancing their predictive scoring and managing their various delinquent portfolios in an attempt to reduce losses. Meanwhile, the monthly payment rate on credit card ABS declined in the second quarter to 17.2%, compared to 18.9% for the first quarter. The Fitch “Yield Index” also declined to 19.9% at the end of 2Q/06, from 20.7% at the end of March.

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1/3 of Consumer Laptops Unprotected

A new survey has found that even though 82% of respondents regularly make purchases online with a credit/debit card, 31% admitted to not protecting their laptops while almost 60% admitted to storing sensitive or confidential information on them. The study by Trend Micro also found that 63% store bank/credit card information on their laptops. Only about a quarter of the consumers believe that their current security software on the laptop will adequately protect their sensitive information from being used if their laptops were stolen. Over a third of respondents are very worried about data theft and identify theft in the cyberspace, while only 14% of participating consumers indicated that they are very worried about car theft.

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ADS Epsilon to Acquire CPC Associates

Dallas-based Alliance Data Systems’ Epsilon unit is acquiring CPC Associates for $70 million in cash. CPC is a provider of consumer and business data. Its data products and marketing solutions are used by direct-response marketers, marketing services/data providers, and franchises/small businesses. Epsilon itself is a current client. One of CPC’s most successful products and key market differentiators is its “new mover” data offering. ADS says the acquisition is part of its expansion strategy for the U.S. Loyalty and Marketing Services business. CPC employees will be integrated into Epsilon. The deal is expected to close in the fourth quarter.

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Dollar General to Accept Credit Cards

Small-box value discounter, Dollar General, will begin accepting VISA credit and debit cards tomorrow at its 8,190 stores in 34 states. Dollar General was the first among its peer group to roll out readers for electronic benefits cards. Dollar General has been accepting PIN-based debit cards since 2003. Fifth Third Processing Solutions serves as the electronic card processor for all of Dollar General’s electronic payments. VISA says the dollar store retail segment has been one of the last untapped markets for payment card acceptance.

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