U.S. small business sales continued to grow steadily in March, despite consumers being more selective in their spending. In fact, higher average ticket sizes helped offset slower transaction volumes as small businesses closed out Q1 on solid footing, according to the Fiserv Small Business Index.
“March reflects a small business economy that remains durable, supported by continued growth in consumer spend, but with signs of cautious behavior,” says Prasanna Dhore, chief data officer, Fiserv. “With energy prices rising, households began weighing tradeoffs carefully. Their selectivity was visible with consumers eating out less and making more deliberate purchases.”
Key takeaways:
· The seasonally adjusted Index rose to 144. Year-over-year sales grew (+1.3%) despite transactions (foot traffic) slowing (-1.3%). Month-over-month sales (+0.7%) and foot traffic (+0.5%) both grew slightly compared to February. With total transactions easing, sales growth was buoyed by higher average tickets, which grew both year over year (+2.6%) and month over month (+0.2%).
· Consumers may have partially offset higher gas prices by moderating spend at food services and drinking places (-1.0% year over year). Limited-service restaurants saw sales decline year over year (-2.9%) as foot traffic fell sharply (-4.2%). Full-service restaurant sales were less affected, with sales growing slightly (+0.4%) and foot traffic declining (-0.3%) year over year.
· Total retail sales rose month over month (+1.2%) and year over year (+0.7%). Food and beverage stores (grocery) sales continued to soften (-0.5% month over month and -1.5% year over year) as consumers made more budget‑conscious purchasing choices.
