Overall consumer spending nationwide in both grocery and retail experiences a cooldown as cost of goods increases, according to new data from Fiserv Inc.
“The Fiserv Small Business Index provides timely insight into small business performance well ahead of other economic indicators,” says Jennifer LaClair, head of merchant solutions at Fiserv. “As consumers adjust their spending patterns, our ability to understand the impact on small businesses helps us work across our ecosystem to better support clients through a changing economic landscape.”
“As the quarter came to a close, consumers throttled back both spending and foot traffic across retail, restaurants and other service-based businesses,” says Prasanna Dhore, chief data officer at Fiserv. “The slowdown was driven by a combination of lower average ticket sizes—the result of abating inflation and budget-conscious consumers—and a series of short-term seasonal demand shifts.”
Key takeaways:
- Nationally, the seasonally adjusted Fiserv Small Business Index for June declined to 140. On a year-over-year basis, both small business sales (+1.6%) and transactions (+4.4%) grew compared to June 2023, though the pace of growth is slowing. This is reflected in declines of small business sales (-2.9%) and transactions (-1.5%) month-over-month.
- Small business retail sales indexed at 142 in June, which reflects growth in year-over-year sales (+2.4%) and transactions (+7.0%) as consumers spent ahead of their 2023 pace. General Merchandise (+8.5%) outpaced all retail subsectors in yearly growth.
- On a monthly basis, the impact was more significant as consumers sought deals and pulled back on discretionary purchases, with month-over-month sales (-3.3%) and transactions (-0.8%) both trending downward.
- Small business restaurant sales (+3.6%) and transactions (+2.3%) continue to grow year-over-year, though growth is also slowing. Average ticket sizes at small restaurants grew (+1.3%). Food and beverage stores (which includes grocery) grew sales (+4.6%) and transactions (+8.1%) year-over-year.
- Month-over-month, total restaurant sales (-1.2%) and transactions (-1.9%) declined. Average ticket sizes at restaurants were up slightly (+0.7%) from May, potentially signaling that rising food prices are dissuading spending. Unlike May, there was no evidence that consumers shifted typical restaurant spending to other food categories, such as grocery, which also softened (-0.3%) month-over-month.
- Specialty trade contractors grew sales (+1.6%) and transactions (+3.8%) year-over-year. Month-over-month sales (-2.1%) and transactions (-2.8%) tapered off as demand for general carpentry and light construction cooled.
