The Fiserv Small Business Index for May 2024 found that small business sales grew 4.3% year-over-year and 0.2% month-over-month. Foot traffic also grew 5.2% year-over-year, but declined 0.5% compared to April.
“Small businesses are a bellwether of the U.S. economy,” said Jennifer LaClair, Head of Merchant Solutions at Fiserv, in a news release. “The Fiserv Small Business Index provides insight into this critical ecosystem well ahead of other economic indicators, and the most recent index shows that consumers continue to spend at a healthy, though slightly slower, pace.”
“Consumer spending recorded another uptick in May, though consumers are keeping a closer eye on their discretionary purchases,” said Prasanna Dhore, Chief Data Officer at Fiserv, in the release. “We’re also seeing a shift toward non-discretionary spending, as spending growth at grocery stores, for example, outpaced that at restaurants.”
Discretionary Spending Continues to Slow
Nationally, small business retail spending was flat while transactions grew 0.7% month-over-month, according to the index. Among all retail categories, Food & Beverage Retailers experienced the most significant spending expansion (+2.1%). Clothing (+0.3%), Sporting Goods (+0.2%) and Health/Personal Care (+0.2%) also delivered small gains over April. Other areas of retail such as General Merchandise (-0.4%), Auto Parts (-0.9%), Building Materials (-1.1%) and Furniture (-1.9%) slipped in May, suggesting that consumers are curbing some of their discretionary spending.
Grocery Sales Grow
Consumers continue to seek a balance in food spending, given the significant share of wallet food purchases consume each month. Restaurant spending was up 4.1% year-over-year and grew slightly (+0.6%) from April, the index states. Restaurant foot traffic, however, decreased 1.2% compared to April as consumers made more trips to Food & Beverage Retailers, including grocers, which saw foot traffic grow 8.4% year-over-year and 1.5% month-over-month.
Mixed Results Across Service Categories
Specialty Trade Contractors year-over-year growth slowed to 2.8%, compared to 4.0% growth in April, while month-over-month sales grew slightly (+0.9%), according to the index. Seasonal demand delivered an uptick in this category for small project contractors, swimming pool servicers and HVAC specialists. Professional, Scientific and Technical Services saw a lively 13.5% increase in sales year-over-year, with a decline of 0.7% from April. Much of this was expected as the acute demands for April tax season services have relaxed. Truck Transportation led all service categories nationally, growing 4.0% month-over-month.
