In a bustling end to the year, small businesses across the United States celebrated a successful December as holiday shoppers boosted their sales, according to the latest report from the Fiserv Small Business Index. The data, based on a range of point-of-sale transactions at approximately 2 million small businesses nationwide, revealed an encouraging uptick in economic activity.
With a seasonally adjusted index of 146 for December, showing a 3-point increase from the previous month, small businesses demonstrated resilience amidst evolving consumer spending habits. Prasanna Dhore, Chief Data Officer at Fiserv, noted that despite a shift in consumer preferences towards service-based businesses, retail sales remained robust. Notably, the report highlighted a decrease in dining out expenditures, with average restaurant ticket sizes experiencing a notable decline.
Fiserv’s findings showed a 4.9% increase in small business sales and a 5.5% growth in total transactions compared to the previous December. This positive momentum mirrored trends observed at larger retail establishments. The National Retail Federation reported a 4% rise in holiday sales for November and December, totaling $994.1 billion, exceeding initial expectations and reflecting a 3.9% growth compared to the preceding two months.
Small retail businesses emerged as a standout performer, with a 4.9% increase in sales and a 5.8% rise in transactions in December. Categories such as general merchandise, clothing, shoes, jewelry, furniture, electronics, appliances, and grocery stores experienced notable sales growth. However, the restaurant industry faced challenges, with a 3.4% decline in sales compared to the previous year, despite a 4.1% increase in transactions. Full-service eateries bore the brunt of this downturn, while quick-service and fast-casual establishments fared relatively better.
The disparity between sales and transactions in the restaurant sector was largely attributed to a significant reduction in average ticket sizes, down by 7.4% from the same period in 2023. This shift underscores the changing consumer behavior in response to evolving economic conditions and preferences.
Overall, the data paints a picture of a dynamic economic landscape, where small businesses have navigated challenges and capitalized on emerging opportunities to drive growth and resilience in the face of shifting consumer trends. As the new year unfolds, businesses will continue to adapt and innovate in response to the evolving demands of the marketplace, shaping the trajectory of economic recovery and growth in the months ahead.