Sales growth at small and medium-sized businesses slowed in June as consumer spending slowed.
Sales growth at small and medium-sized businesses slowed in June as consumers paused spending.
That’s according to new data from financial services and payments provider Fiserv.
Rising prices for food and other necessities and high interest rates are putting a strain on consumers’ wallets, leading them to cut back on spending. The Commerce Department said Tuesday that sales at retailers of all sizes were flat in June from May.
Nationwide, the seasonally adjusted Fiserv Small Business Index, which gauges the performance of small businesses, fell to 140 in June from 144 in May. Month-over-month sales for small businesses fell 2.9% from May, and the number of transactions fell 1.5%. However, sales and the number of transactions increased compared to June 2023.
Fiserv said the slowdown since May was due to smaller average ticket sizes as inflation slowed and consumers became more budget-conscious.
“As the end of the quarter approached, consumers scaled back both spending and foot traffic at retail stores, restaurants and other service-based businesses,” said Prasanna Dore, Fiserv’s chief data officer.
However, some of this decline may be due to short-term seasonal changes in demand. The notable increase in spending in June was driven by higher insurance premiums, increased summer foot traffic, and new sign-ups at web-based content hosting sites. However, consumers are reducing spending and visits to small businesses across many industries, including retail, accommodations, restaurants, outpatient care, and professional services.
The Fiserv Small Business Index uses point-of-sale transaction data, including in-store and online card, cash and check transactions, from approximately 2 million small businesses in the U.S.
