Small Business Index for May 2024: Slower Spending, Shift Toward Non-Discretionary Purchases

In May, the seasonally adjusted Fiserv Small Business Index remained steady at 145, with small business sales increasing year-over-year but remaining flat from the previous month. Sales in May increased by 4.3% year-over-year and 0.2% month-over-month, as reported by the Fiserv Small Business Index for May 2024. Foot traffic also grew by 5.2% year-over-year but dropped 0.5% compared to April.

Nationally, small business retail spending stayed level in May, with transactions growing by 0.7% month-over-month. Food & beverage retailers saw the most significant spending expansion at 2.1%, while clothing, sporting goods, and health/personal care experienced modest gains over April.

On the other hand, spending at general merchandise, auto parts, building materials, and furniture slipped in May, suggesting consumers are scaling back on discretionary purchases.

Consumer spending saw an increase in May, but consumers are more cautious about their discretionary spending. There is a noticeable shift towards non-discretionary spending, with growth in grocery store spending outpacing that at restaurants.

Despite a 4.1% increase in year-over-year restaurant spending, foot traffic decreased by 1.2% compared to April. In contrast, foot traffic in food & beverage retailers, including grocers, grew by 8.4% year-over-year and 1.5% month-over-month.

According to Jennifer LaClair, head of merchant solutions at Fiserv, small businesses play a vital role in the U.S. economy.

The Fiserv Small Business Index provides valuable insights into this sector in advance of other economic indicators,

and the latest index indicates that consumers are still spending at a healthy rate,

although slightly slower than before.