By Roy Urrico
Milwaukee-based Fiserv, a provider of payments and financial services technology, published the Fiserv Small Business Index for August 2024. The Index, according to Fiserv, is an indicator of the pace and mix of consumer spending at small businesses in the United States at national, state and industry levels.
The Fiserv Small Business Index is derived from point-of-sale transaction data, including card, cash, and check transactions in-store and online across approximately two million U.S. small businesses, including hundreds of thousands leveraging the Clover point-of-sale and business management platform, which is now part of Fiserv.
“At the beginning of each month, the Fiserv Small Business Index provides first-to-market insight into consumer spending at small businesses,” said Jennifer LaClair, head of merchant solutions at Fiserv, in the report announcement. “This monthly view of consumer spending has become an important economic indicator, providing a timely understanding of small business performance so we can better serve clients and partners across the small business ecosystem.”
Business and Retail Numbers
The Index, which includes historical activity back to 2019, aligns with the definitions used by the U.S. Small Business Administration and is calibrated to the U.S. Census distribution to ensure proper balance and representation. Small businesses are organized based on the North American Industry Classification System (NAICS). It is available as both seasonally adjusted and non-seasonally adjusted values and follows a rigorous monitoring and governance program.
Nationally, the seasonally adjusted Fiserv Small Business Index in August was 141, unchanged from July. On a year-over-year basis, both small business sales (+1.6%) and total transactions (+5.7%) rose compared to August 2023. Month-over-month sales declined slightly (-0.3%) compared to July despite transactions growing (+1.3%).
“Consumers made notable shifts to their spending patterns in August, resulting in restaurant and retail – including grocery, gas stations, and clothing – all trending upward in the month,” said Prasanna Dhore, Fiserv’s chief data officer, in the report announcement.. “Meanwhile, many service-based businesses, including specialty trade contractors and professional services, saw growth rates slow.”
The August Retail Index rose one point to 147. Year-over-year sales (+3.0%) and transactions (+7.3%) grew significantly as average ticket sizes saw a noticeable decline (-4.3%) compared to 2023. Back-to-school shopping, favorable pricing trends and a recently reported rise in consumer confidence contributed to this growth. Year-over-year, the fastest growing retail categories were general merchandise (+8.8%), food and beverage stores (+7.9%) and sporting goods (+5.6%).
Following this yearly trend, month-over-month retail sales (+1.0%) and transactions (+1.5%) both grew as average ticket sizes declined (-0.5%). Monthly growth highlighted a different mix of consumer priorities, with clothing (+2.1%), food and beverage (+1.9%) and furniture (+1.3%), seeing the most growth compared to July.
Restaurants Change Tendency
Food service and drinking establishments, which includes restaurants, indexed at 126 points in August, a 3-point gain compared to July. The rising trend in spending marked a notable turnaround compared to July’s index, when spend slowed on both an annual and monthly basis. Gains were widespread across the U.S., with nearly every state in the country seeing increased restaurant patronage in August.
Year-over-year, restaurants saw strong growth in both total sales (+4.9%) and foot traffic (+4.2%); average ticket size grew slightly (+0.7%). Month-over-month restaurant sales (+2.7%) and transactions (+1.1%) increased compared to July, reversing a streak of two consecutive months of slowing restaurant sales and foot traffic. Average ticket size also grew (+1.5%) month-over-month.
Other Fiserv Small Business Index Key Takeaways
Professional, scientific, and technical services continue seeing significant growth in sales (+9.6%) and transactions (+8.5%) year-over-year, despite sales (-1.0%) and transactions (-2.8%) slowing slightly compared to July. Veterinary, legal, advertising and general business services among the strongest services in demand.
Specialty trade contractor sales (-0.9%) declined year-over-year, while transactions grew (+1.5%). Month-over-month sales (-2.2%) also slowed while transactions remained steady (+0.2%). Demand for heating, ventilating, and air conditioning (HVAC) and plumbing services saw the biggest decline compared to August 2023, while electricians, roofers and concrete contractors showed modest increases.
Additional year-over-year sales growth categories included amusement/gambling/recreation (+14.1%), web search, libraries and information services (+12.7%), and food manufacturing (+12.8%). The sharpest annual sales declines were in real estate (-15.2%), hospitals (-7.7%) and educational services (-6.8%).
Truck transportation (+4.4%), food manufacturing, (+3.9%), and performing arts spectator sports and related industries (+3.1%) sales all saw month-over-month growth; educational services (-5.5%), insurance (-4.3%) and ambulatory healthcare (-3.4%) sales saw the largest month-over-month declines.