The January 2024 edition of the Fiserv Small Business Index found that spending at small businesses held steady to start the year, growing +0.1% month-over-month (MOM) to remain at an index of 138, unchanged from December. Year-over-year (YOY) sales reflected healthy consumer demand, growing +1.7%, but off the pace of the +2.6% increase in December 2023, the index states.
“Small businesses maintained steady sales in January despite harsh weather conditions impacting much of the country,” said Prasanna Dhore, Chief Data Officer at Fiserv in a news release. “Small businesses in the Retail sector outperformed the small business category overall, with growth driven by consumer spending on building materials, health and personal care, and general merchandise. Spending in the Food Services subsector, which includes restaurants and bars, slipped as we moved out of the holiday season.”
Retail Spotlight
The January index for Retail was 143, representing a 1-point gain over December, with retail sector small businesses outperforming the small business category overall. This equated to +0.7% MOM sales growth and +1.9% YOY growth, according to the index.
Foot traffic across retail was impressive, up +4.2% YOY, signaling consumer demand for goods has continued to expand post-holiday. Building Materials, Health and Personal Care and General Merchandise led the growth. Areas that typically represent higher discretionary spending did not keep pace, namely Clothing and Sporting Goods, the index states.
Small Business Insights
Food Services and Drinking Places saw demand slip compared to the holiday season. The January index for this subsector fell 5 points from December, to 122. MOM sales were down -4.1%, and YOY sales were down -1.9%, according to the index.
Specialty Trade Contractors had a January index of 145, marking a 1-point decline from December. MOM sales were slightly down at -0.5%, while the subsector grew modestly at +0.9% compared to January 2023. The Specialty Trade Contractors subsector includes service providers, such as carpentry and masonry, roofing, electrical and heating and plumbing specialists, the index states.
Professional, Scientific and Technical Services increased 1 point over December to an index of 148 in January. Small business sales in this subsector grew at +0.7% compared to December and were up significantly compared to January 2023, growing +6.0%. This broad subsector includes veterinary, legal, accounting, advertising, tax preparation and other professional services, according to the index.
