Small business sales stagnant, spending patterns shift in May

The seasonally adjusted Fiserv Small Business Index for May remained steady at 145.

Small business sales increased year-over-year in May, but stayed flat from the previous month.

According to the Fiserv Small Business Index for May 2024, small business sales grew 4.3% year-over-year and 0.2% month-over-month. Foot traffic grew 5.2% year-over-year and declined 0.5% compared to April. The seasonally adjusted Fiserv Small Business Index for May remained steady at 145, with no change occurring from April.

“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. “We’re also seeing a shift toward non-discretionary spending, as spending growth at grocery stores, for example, outpaced that at restaurants.”

Nationally, small business retail spending was flat while transactions grew 0.7% month-over-month. 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. 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.

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%). 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 substantial 13.5% increase in sales year-over-year, with a decline of 0.7% from April. Fiserv says that much of this increase 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.

“Small businesses are a bellwether of the U.S. economy,” said 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.”