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Sector-level trends showed consumers shifting more spend to retailers and restaurants in February and spending less at service-based businesses, according to Fiserv’s Fiserv Small Business Index for February.
“Consumer spending continued to show resiliency in February, resulting in a second consecutive month of small business sales growth to start 2025,” says Prasanna Dhore, chief data officer, Fiserv. “Notably, restaurants, furniture, auto parts, clothing and healthcare all saw growth during the month.”
Key takeaways:
- On a year-over-year basis, small business sales (+2.1%) and total transactions (+4.0%) showed healthy growth. Month-over-month sales (+0.1%) and transactions (+1.6%) also grew.
- Year-to-date, combined sales growth for January and February is 3.5%, which is about 1.5 percentage points less than sales growth from the same two-month period in 2024. The slowing growth is the result of lower average ticket size, while transaction growth remains steady.
- Consumer spending at small business retail remained strong with sales (+1.6%) and transactions (+1.2%) growing year over year. Average ticket sizes (+0.4%) also grew, marking the first month since January 2023 that retail tickets have shown a year-over-year increase. Retail sales growth year over year was led by general merchandise (+7.3%), clothing (+3.7%) and sporting goods/miscellaneous retailers (+3.6%).
- Consumer spending at small business restaurants declined (-2.4%) year over year despite transactions (or foot traffic) growing (+5.9%). These annualized sales declines despite foot traffic growing reflect the ongoing trend of consumers trading down for lower-cost options when dining out.
- As consumers shifted more of their dollars to restaurants and retailers in February, service-oriented spending showed signs of slowing, growing just +2.3% year over year and declining (-0.2%) month over month.
- States showing the most year-over-year sales growth were North Dakota (+11.8%), Georgia (+10.6%), South Carolina (+8.6%), Minnesota (+7.0%) and Virginia (+6.2%). The strongest-performing states month over month were North Dakota (+8.8%), Louisiana (+5.7%), Texas (+4.3%), Indiana (+4.0%) and Alabama (+3.6%).
- Large cities showing the most year-over-year sales growth were Atlanta (+14.4%) and Miami (+5.3%); conversely, the New York metro area saw sales decline (-5.7%) year over year. On a monthly basis, sales growth was strongest in Dallas (+4.6%), Atlanta (+3.2%) and Philadelphia (+1.2%).
