Small Business Sales on the Rise, But Discretionary Spending Slows Down

Small Business Sales on the Rise, with Discretionary Spending Slowing Down

According to the Fiserv Small Business Index for April 2024, small business sales are on a positive trajectory, with a 5.6% year-over-year (YoY) growth and a 2.2% month-over-month (MoM) increase. The seasonally adjusted index also saw a four-point increase to 145, indicating that consumer spending patterns have shifted significantly in recent months.

Small business retailers experienced a noticeable uptick in sales, with a 1.6% MoM growth and a significant 7.7% YoY increase. Various retail subsectors, including Furniture, Building Materials, Motor Vehicle Parts, and Gas Stations, all saw strong MoM increases from March to April.

However, businesses capturing discretionary spending did not fare as well in April compared to previous months. Food Services and Drinking Places saw a slowdown in sales growth, with restaurant spending decreasing by 3.1% from March and 0.2% YoY. Despite the decrease in spending, there was still significant foot traffic in restaurants, indicating that consumers are opting for lower-priced food options or choosing more affordable dining establishments.

Consumer spending patterns shifted significantly in April due to changes in service-based business spending offsetting the slowdown in discretionary spending. Professional services like tax preparation experienced a 7.0% increase over March and substantial YoY growth of 16.4%. The demand for bookkeeping, accounting, and other related business services surged due to the IRS tax filing deadline