Despite a year-over-year increase in sales, small business retail spending stayed flat in May. Foot traffic also increased by 5.2% year-over-year but declined by 0.5% compared to April. The Fiserv Small Business Index for May remained unchanged at 145, indicating that small businesses are being more cautious with discretionary purchases.
Nationally, food & beverage retailers saw the most significant spending expansion at 2.1%, while other categories such as clothing, sporting goods, and health/personal care also saw small gains over April. However, spending at general merchandise, auto parts, building materials, and furniture experienced a slight decrease in May.
Consumers are showing a slight increase in spending in May but are being more cautious with discretionary purchases. Prasanna Dhore, Chief Data Officer at Fiserv notes a shift towards non-discretionary spending, with higher growth in spending at grocery stores compared to restaurants. Despite this trend, restaurant foot traffic decreased by 1.2% compared to April.
Overall, the Fiserv Small Business Index provides valuable insights into the economic ecosystem ahead of other indicators. Head of Merchant Solutions at Fiserv Jennifer LaClair emphasizes that small businesses are key indicators of the U.S economy and their performance can signal changes in consumer behavior and economic trends before they become apparent in broader data sets.
