Fiserv Index Remains Unchanged in August

U.S. small businesses had a mixed performance in August, with dollar volume increasing but transactions dropping for the tenth straight month, according to the August Small Business Index released by Fiserv Inc. The index reading was 145, flat with July and the third straight month at that level, though up two points from a year ago.

Adjusted for inflation, the index came to 109, down two points from a year ago, and flat with June and July, according to Fiserv.

Foot traffic was up 0.7% from a year earlier, but the near-term trend was less rosy, with traffic down 0.6%, registering a 0.8% dip in sales. The only retail sectors showing growth in August from July were gas stations and building materials.

The transaction index reading was 103 for August, flat with July and June and down from 104 in August last year. Fiserv noted that the index has been flat for the past three months.

Gas stations and fuel dealers saw an increase of 15.1% year-over-year, while food and beverage retailers saw a drop of 1.4%, the worst showing among the sectors measured. The Dallas and Atlanta metro areas stood out with index increases of 5% and 4.7%, respectively.

The restaurant business saw a 0.3% drop year-over-year. This decline may be due to changing consumer behavior, as households continue to prioritize value.

Consumers are still spending, but they’re making fewer trips and becoming more deliberate with their purchases. Prasanna Dhore, Fiserv’s chief data officer, said in a statement, “For many small business categories, August reinforces a trend we’ve seen throughout much of the year: consumers are still spending, but they’re making fewer trips and becoming more deliberate with their purchases.”

With traffic declining and households continuing to prioritize value, each customer visit matters more for small businesses. As a result, small businesses may need to adapt their strategies to attract and retain customers, focusing on card-based payments and other ways to provide value.

In the middle of the year, it’s clear that small businesses are facing a challenging environment, and this trend will likely continue in the coming months. As consumers become more discerning, small businesses will need to focus on providing value to their customers in order to remain competitive.

The index’s flat reading for the third straight month suggests that small businesses are not seeing significant growth, but rather a steady state. This could be due to a variety of factors, including changing consumer behavior and increased competition.

They will need to monitor the index’s progress in the coming months to understand the state of small businesses. The Small Business Index provides valuable insights into the performance of small businesses in the U.S. and is adjusted for inflation, giving a more accurate picture.

Small businesses are facing challenges in the current economic environment, where sales trends can be unpredictable.