Small businesses see boost in August; retail, restaurants lead way
Small business sales saw a slight increase year-over-year in August, with restaurant and retail sales trending upward.
According to Fiserv’s latest Small Business Index, small business sales grew 1.6% compared to August 2023, and declined 0.3% from July. Transactions grew 5.7% year-over-year and 1.3% month-over-month. Nationally, the seasonally-adjusted Fiserv Small Business Index in August was 141, unchanged from July.
The Small Business Retail Index rose one point in August to 147. Year-over-year sales (+3.0%) and transactions (+7.3%) grew significantly while the average ticket sizes saw a noticeable decline (-4.3%) compared to 2023. Fiserv says back-to-school shopping, favorable pricing trends, and a recently reported rise in consumer confidence contributed to this growth. Year-over-year, the fastest growing retail categories were general merchandise (+8.8%), food and beverage stores (+7.9%) and sporting goods (+5.6%).
Following the yearly trend, month-over-month retail sales (+1.0%) and transactions (+1.5%) both grew as average ticket sizes declined (-0.5%). Monthly growth highlighted other consumer priorities, with clothing (+2.1%), food and beverage (+1.9%) and furniture (+1.3%) seeing the most growth compared to July.
Food services and drinking places, which includes restaurants, indexed at 126 in August, a three-point gain compared to July. The increase in spend marked a notable turnaround compared to Fiserv’s July index, when spend slowed on both an annual and monthly basis. Gains were widespread across the U.S., with nearly every state in the country seeing increased restaurant visitation in August.
Year-over-year, restaurants saw strong growth in both total sales (+4.9%) and foot traffic (+4.2%), while average ticket size grew slightly (+0.7%). Month-over-month restaurant sales (+2.7%) and transactions (+1.1%) increased compared to July, reversing a streak of two consecutive months of slowing restaurant sales and foot traffic. Average ticket size also grew (+1.5%) month-over-month.
“Consumers made notable shifts to their spending patterns in August, resulting in restaurant and retail – including grocery, gas stations and clothing – all trending upward in the month,” said Prasanna Dhore, chief data officer at Fiserv. “Meanwhile, many service-based businesses, including specialty trade contractors and professional services, saw growth rates slow.”
[READ MORE: Small business sales slowed in June in most categories]
Other insights from the August Small Business Index include:
- Professional, scientific and technical services continue seeing significant growth in sales (+9.6%) and transactions (+8.5%) year-over-year, despite sales (-1.0%) and transactions (-2.8%) slowing slightly compared to July. Demand for a wide variety of professional services was healthy in August, with veterinary, legal, advertising and general business services among the strongest.
- Specialty trade contractor sales (-0.9%) declined year-over-year while transactions grew (+1.5%). Month-over-month sales (-2.2%) also slowed while transactions remained steady (+0.2%). Demand for HVAC and plumbing services saw the biggest decline compared to August 2023, while electricians, roofers and concrete contractors had modest gains.
- Additional year-over-year sales growth categories included amusement/gambling/recreation (+14.1%), web search, libraries and information services (+12.7%) and food manufacturing (+12.8%). The sharpest annual sales declines were in real estate (-15.2%), hospitals (-7.7%) and educational services (-6.8%).
- Truck transportation (+4.4%), food manufacturing, (+3.9%) and performing arts spectator sports and related industries (+3.1%) sales all saw month-over-month growth. Educational services (-5.5%), insurance (-4.3%) and ambulatory healthcare (-3.4%) sales saw the largest month-over-month declines.
