Small business retail spending flat in May — but not in all categories

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

Small business sales in May grew 4.3% year-over-year and 0.2% month-over-month, according to the Fiserv Small Business Index for May 2024.  Foot traffic grew 5.2% year-over-year and declined 0.5% compared to April.

Nationally, small business retail spending was flat in May 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. 

Spending at 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.

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.”

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 & beverage Retailers, including grocers, which saw foot traffic grow 8.4% year-over-year and 1.5% 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.”