Retail, services boost small business sales in December
Small businesses ended 2024 on a high note, with sales in December increasing nearly 5% year-over-year.
Small business sales increased 4.9% and total transactions grew 5.5% compared to 2023, according to the Fiserv Small Business Index for December 2024. Month-over-month sales rose 2.0% and transactions rose 0.6% compared to November. The seasonally adjusted Index for December was 146, a three-point increase from the previous month.
“Small business sales continued their growth in December despite consumer spending patterns beginning to shift,” said Prasanna Dhore, chief data officer at Fiserv. “Notably, consumers diverted more spend to service-based business, retail spending continued to display strength, and consumers spent less dining out as average restaurant ticket sizes continued to decline.”
Retail
Nationally, consumer spending at small business retail remained strong through the holiday season, with both sales (+4.9%) and transactions up 5.8% year-over-year in December. Average retail ticket sizes declined (-0.9%) slightly compared to 2023. The fastest-growing retail categories were general merchandise (+14.4%), clothing, shoes and jewelry retailers (+7.5%), furniture, electronics, and appliances (+6.3%), and grocery (+5.3%).
Compared to November 2024, small business retail sales also grew (+1.0%). The strongest month-over-month gains were seen at clothing, shoes and jewelry retailers (+7.6%), general merchandise (+3.1%), and health and personal care retailers (+2.6%). Grocery (-1.3%) and sporting goods (-0.1%) were the only retail subsectors to experience slower growth compared to November.
[READ MORE: Fiserv: Grocery, general merchandise boosts small business sales in November]
Restaurants
Consumer spending at small business restaurants slowed in December, with sales shrinking (-3.4%) despite transactions (or foot traffic) continuing to grow (+4.1%) year-over-year. Restaurants seeing the sharpest slowdown in sales were full-service restaurants, including upscale and family dining, while quick service and fast casual restaurants performed better. Fiserv says the disparity in sales and transactions was the result of a significant reduction in average ticket size (-7.4%) compared to 2023.
Month-over-month restaurant sales (-1.6%) declined in December while total restaurant transactions (+1.4%) grew. Average ticket sizes (-3.0%) declined compared to November.
Services
Fiserv found that consumers ramped up spending in December at service-based organizations where growth had slowed in recent months. As a whole, small business services grew year-over-year (+4.9%) and month-over-month (+2.1%).
Compared to 2023, the fastest-growing service categories were professional, scientific, and technical services (+12.2%), truck transportation (+8.6%) and food manufacturing (+9.8%). Compared to November, ambulatory healthcare (+5.4%), insurance (+4.9%) and professional services (+3.2%) were the fastest-growing categories.
For December, Fiserv found that Vermont (+15.4%), Georgia (+13.5%), South Carolina (+13.3%), Wisconsin (+12.0%) and Kansas (+11.8%) showed the most growth among states compared to December 2023. North Dakota (+7.7%), New Jersey (+5.2%) and Arizona (+5.1%) were the strongest performing states for sales growth month-over-month.
Atlanta (+14.4%) and Miami (+10.4%) were the strongest-performing large cities for small business sales growth year-over-year. On a monthly basis, sales growth was strongest in Los Angeles (+4.1%), San Francisco (+3.7%) and Philadelphia (+3.7%).
