December Insights: Fiserv Small Business Index Shows Growth

The Rise of Small Businesses: Insights from Fiserv

In a noteworthy presentation, Fiserv, Inc. (NYSE: FI), a global leader in payments and financial services technology, has revealed its Small Business Index for December. This essential report marks a significant milestone as small businesses conclude a flourishing period. The seasonally adjusted Index for December indicates a score of 146, reflecting a three-point uptick from November, signaling a promising outlook for small business owners who experienced a robust holiday season.

Continued Growth in Small Business Sales

Prasanna Dhore, Chief Data Officer at Fiserv, stated, "Small business sales continued their growth in December despite shifts in consumer spending patterns. Notably, there was a notable diversion of spending towards service-based businesses, while retail remained strong. However, dining out saw a decline, as average restaurant tickets decreased." These trends represent a dynamic shift in consumer behavior, as businesses adapt to evolving demands.

Year-Over-Year Growth Statistics

An analysis reveals significant yearly growth, with small business sales increasing by 4.9% and total transactions by 5.5% compared to the previous year. Month-over-month, sales exhibited a more modest growth of 2.0%, alongside a 0.6% increase in transactions when compared to November.

The Retail Sector: A Strong Performer

The retail segment showcased impressive resilience, as consumer spending at small business retailers surged throughout December. Year-over-year statistics show a robust increase in sales of 4.9% and transactions up by 5.8%. Although the average retail ticket size dipped slightly by 0.9% from 2023, the performance across various retail categories remains promising.

Highlights of Retail Categories

The most significant growth in retail categories included General Merchandise with a remarkable increase of 14.4%, Clothing, Shoes and Jewelry Retailers at 7.5%, and Furniture, Electronics, and Appliances rising by 6.3%. Despite the overall success, certain sectors such as Grocery and Sporting Goods saw slight declines.

Restaurant Spending Trends

In contrast, small business restaurants experienced a slowdown, with sales declining by 3.4% despite a year-over-year increase in transactions of 4.1%. This decline is attributed primarily to a 7.4% drop in average ticket sizes across full-service dining establishments. Consumers shifted preferences, leading to varying performance metrics across restaurant types.

Month-Over-Month Restaurant Insights

On a monthly comparison, restaurant sales fell by 1.6%, while overall transactions increased by 1.4%. Continuing this trend, average ticket sizes also reduced by 3.0% compared to the previous month.

Service Industry Gains Momentum

Shifting focus to services, December marked an upswing in consumer spending within service-oriented sectors, which had seen slower growth in prior months. These services reported a year-over-year growth of 4.9% and a month-over-month boost of 2.1%, demonstrating resilience in the face of economic challenges.

Top Growing Service Categories

The year-over-year leaders in service growth included Professional, Scientific, and Technical Services, surging by 12.2%, followed closely by Truck Transportation at 8.6%, and Food Manufacturing at 9.8%. Monthly comparisons further revealed Ambulatory Healthcare and Insurance as strong contenders in growth for the current month.

Regional Trends and Small Business Performance

When examining regional performance, certain states exhibited remarkable growth trends compared to the previous year. Vermont, Georgia, and South Carolina led the charge with increases of over 13%. Month-over-month, North Dakota and New Jersey showed the highest sales growth rates among states.

Growth in Major Cities

On a city level, Atlanta and Miami emerged as leaders in small business sales growth year-over-year, while Los Angeles and San Francisco demonstrated respectable monthly growth metrics.

Understanding the Fiserv Small Business Index

The Fiserv Small Business Index provides valuable insights as it uniquely aggregates consumer spending data across the U.S. small business landscape. Employing point-of-sale transaction data, the Index allows businesses to gauge consumer activity through a straightforward interface, offering a reliable measurement of small business performance across various sectors.

About Fiserv

As a Fortune 500 company, Fiserv, Inc. (NYSE: FI) is committed to facilitating the movement of money and information in innovative ways. The organization provides cutting-edge solutions in payment processing, digital banking, and e-commerce, while boasting a strong track record of being recognized as one of Fortune's Most Admired Companies. For detailed insights into Fiserv and its offerings, consider exploring their official site.

Frequently Asked Questions

What is the Fiserv Small Business Index?

The Fiserv Small Business Index is a monthly report that measures consumer spending metrics within the small business sector in the U.S., derived from point-of-sale transaction data.

How did small businesses perform in December?

Small businesses reported growth in sales and transactions year-over-year, enjoying a strong holiday season performance despite some challenges.

What sectors showed the most growth?

Retail and service sectors demonstrated significant year-over-year growth, with specific categories like General Merchandise and Professional Services leading the way.

What challenges did restaurants face?

Restaurants experienced sales declines in December, particularly due to decreases in average ticket sizes while maintaining steady foot traffic.

How can businesses utilize the Fiserv Small Business Index?

Businesses can leverage the Index to better understand consumer spending trends and benchmark their performance against peers in the industry.

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