Consumer spending at small businesses saw a notable uptick in July, driven by robust sales of general merchandise and health and personal care products. The Fiserv Small Business Index, which tracks point-of-sale transaction data from approximately 2 million U.S. small businesses, increased by 1 point to 141 following a slight dip in June.
Year-over-year comparisons revealed a 3.5% increase in sales and a 3.3% rise in the number of transactions. Retail spending experienced a significant surge of 4.6%, with retail transactions jumping by 5.8%. Notably, general merchandise sales soared by 10.9%, while health and personal care products saw an 8.6% increase. Additionally, building equipment and garden materials sales rose by 6.2%, food and beverage sales by 4.9%, and furniture, electronics, and appliances by 4.7%.
However, the restaurant sector faced a setback with a 1.6% decline in sales, despite a modest 0.7% increase in foot traffic. Average check sizes for diners decreased by 2.4% compared to the previous year, although the reason behind this decline remains unclear.
Commenting on the data, industry experts noted that consumer spending patterns are evolving, with retail spend rebounding notably compared to the previous month. Specialty trade and professional services also performed well, attributed to seasonal demand and stable inflation rates.
The positive trends in consumer spending in July are seen as a promising start to the second half of the year for many small businesses, indicating a potential economic recovery in the sector.
