Small business sales grew 4.3% year-over-year, and 0.2% month-over-month, according to new data from Fiserv. And, foot traffic grew 5.2% year-over-year and declined 0.5% compared to April.
“Small businesses are a bellwether of the U.S. economy,” says Jennifer LaClair, head of merchant solutions at Fiserv. “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,” says Prasanna Dhore, chief data officer at Fiserv. “We’re also seeing a shift toward non-discretionary spending, as spending growth at grocery stores, for example, outpaced that at restaurants.”
Key takeaways:
- Nationally, small business retail spending was flat while transactions grew 0.7% month-over-month. Among all retail categories, food and 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.
- 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. Restaurant foot traffic, however, decreased 1.2% compared to April, as consumers made more trips to food and beverage retailers, including grocers, which saw foot traffic grow 8.4% year-over-year and 1.5% month-over-month.
- Year-over-year growth for specialty trade contractors slowed to 2.8%, compared to 4.0% growth in April, while month-over-month sales grew slightly (+0.9%). 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 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.
