Small business sales growth slowed in June as consumers took a pause on spending.
That’s according to new data from financial services and payments provider Fiserv.
Consumers have been reining in spending as high prices on groceries and other necessities and high interest rates weigh on their pocketbooks. The Commerce Department reported Tuesday that sales for retailers of all sizes were flat in June from May.
Nationally, the seasonally adjusted Fiserv Small Business Index, which rates small business performance, declined to 140 in June from 144 in May. Month-over-month sales at small businesses dipped 2.9% from May, and transactions fell by 1.5%. But sales and transactions rose compared to June 2023.
The slowdown from May was driven by lower average ticket sizes as inflation slowed and consumers became more budget conscious, according to Fiserv.
“As the quarter came to a close, consumers throttled back both spending and foot traffic across retail, restaurants and other service-based businesses,” said Prasanna Dhore, chief data officer at Fiserv.
Some of this tapering could be due to short-term seasonal demand shifts, however. Notable increases in June spending came from rising premiums for insurance, higher summer foot traffic and new subscription sign-ups at web-based content hosting sites. But consumers cut back on small business spending and visits across a number of industries, including retail, accommodations, restaurants, ambulatory health care and professional services.
The Fiserv Small Business Index uses point-of-sale transaction data, including card, cash, and check transactions in-store and online across about 2 million U.S. small businesses.