American Express 2001 Annual Report Download - page 12

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environment to deliver earnings growth. To this end, we have made significant
progress in a number of key areas:
WE HAVE EXPANDED THE DIVERSITY OF OUR CARD-SPENDING BASE.
While the traditional travel and entertainment category remains an important
driver of revenue, we have significantly increased the use of our cards for
everyday spending at such places as gas stations, supermarkets, retailers, as well
as for telecommunications. During periods of economic weakness, consumers
tend to maintain their level of spending in these industries, even while cutting
back on travel and entertainment. Our increased presence in these
sectors enables us to produce more stable charge volume.
Over the past ten years, we also have significantly expanded the roster of mer-
chants who accept our card products. In 1990, 65 percent of our billings came
from the travel and entertainment sectors and 35 percent from retail and other
sectors. Today that proportion is essentially reversed; everyday spending now
accounts for about 60 percent of the business billed on American Express Cards.
Our progress in this area continued during 2001 with the signings of several key
merchants outside the travel and entertainment industries, including Pathmark
Supermarkets, REI (sporting goods), PayPal (online payment service) and Qwest
Communications International Inc. in the United States. Internationally, our
signings included Singapore Telecom and Arrow Pharmaceuticals in France.
In our commercial card business, we are also making a shift to reduce our
reliance on travel and entertainment spending with the expansion of our
Corporate Purchasing Card program for large and middle market companies.
axp_10
We are re:positioning
American Express for long-term, sustainable growth.
US CARD SPENDING
Charge Volume by Industry
❚Retail and Other
❚T&E Related
35%
60%
65%
40%
1990 2001
The use of American Express
Cards for “everyday” spending
at places such as gas stations,
supermarkets, retailers and
for telecommunications has
increased to 60 percent of
total U.S. billings, up from only
35 percent a decade ago.