Navigating Uncertainty: Insights from the Fiserv Small Business Index
Understanding Consumer Behavior and Sector Trends Shaping Small Business Performance
In an economic landscape marked by ongoing uncertainty, small businesses continue to navigate shifting consumer behaviors and market dynamics with remarkable adaptability. As the backbone of local economies, these enterprises are adjusting to evolving demands, balancing essential needs with discretionary spending, and finding new ways to engage customers. This resilience highlights the nuanced reality facing small business owners today—one of cautious optimism amid challenges, where strategic agility is key to sustaining growth and fostering community connections.
This is reflected in the Fiserv Small Business Index (FSBI) for May 2025, which remained steady at 151. Sales inched up +0.2% month-over-month and maintained solid year-over-year growth of +3.3% despite ongoing economic uncertainty. Total transactions rose +3.8% year-over-year, but fell -2.7% from April, marking the largest monthly decline in foot traffic since February 2023. This suggests consumers are visiting businesses less frequently.
Other FSBI Highlights
The average ticket size increased by +2.9% from April, reflecting a shift in consumer spending patterns, changing demand, and possibly higher prices. Over the previous year, average ticket size had been declining slightly each month1.
Essential spending continues to outpace discretionary purchases, growing at twice the rate as consumers focus more on necessities.
Service-based small businesses led growth:
Service sales rose +3.9% year-over-year, outpacing goods (+1.9%)
Month-over-month, services grew by +0.4% while goods declined by -0.3%, highlighting a preference for experiences and essential services.
Restaurant sales among small businesses increased by +1.8% year-over-year and by +0.6% month-over-month, even as foot traffic dropped by -5.6% from April, especially in full-service establishments.
Retail sales grew modestly year-over-year (+0.9%), but declined -1.0% month-over-month.
Transactions were up (+2.9%), but the average ticket size fell nearly -2.0% year-over-year, indicating more frequent but smaller purchases, likely due to deal-seeking and inflation concerns.
Food & Beverage (+3.9%) and Clothing (+5.2%) retailers led growth, while Gasoline (-5.4%) and Health/Personal Care (-1.7%) fell.
Regionally, 30 of 50 states saw sales growth from April
New Mexico (+5.9%), Maryland (+3.2%), and Rhode Island (+3.1%) are leading month-over-month
Year-over-year, Washington (+13.3%), South Carolina (+11.3%), and Maryland (+10.1%) posted the strongest gains.
Among large cities, San Francisco (+10.0%) and Atlanta (+9.5%) led annual growth, while Dallas (+2.0%) and Chicago (+1.7%) saw the strongest monthly momentum.
Key Takeaways
Small businesses are demonstrating notable resilience in the face of persistent economic uncertainty and evolving consumer behaviors. The FSBI shows that, despite challenges such as declining foot traffic and cautious consumer spending, small businesses are finding ways to adapt and sustain growth.
Consumers are increasingly prioritizing essential goods and services over discretionary purchases, a trend that is now defining the small business landscape. This shift is evident in the outperformance of service-based sectors and essential retail categories, with businesses adjusting their offerings and strategies to meet these changing demands1.
Businesses are responding to inflation and reduced consumer visits by focusing on increasing the average transaction size and optimizing operations. Many are leveraging deal-seeking behaviors by offering promotions and adjusting pricing strategies, while also maintaining a strong focus on customer experience and value.
Growth is not uniform; some states and metropolitan areas are experiencing stronger momentum, reflecting local economic conditions and consumer preferences. This underscores the importance of agility and local market knowledge for small business success.
Despite concerns about inflation, interest rates, and a potential economic slowdown, most small business owners remain optimistic about their own prospects and are planning for growth, even as they prepare for continued volatility. This optimism is supported by proactive measures such as cost control, strategic investment, and a focus on essential services.
Small businesses are not just surviving but actively managing risk and capitalizing on new opportunities. Their ability to pivot toward essentials, adapt offerings, and maintain operational resilience is enabling steady performance, even as the broader economic environment remains unpredictable.
About the Fiserv Small Business Index
The Fiserv Small Business Index stands out as a robust, timely, and granular tool for tracking the health of the U.S. small business sector. Its reliance on real transaction data, inflation-adjusted views, and broad sector and geographic coverage makes it invaluable for anyone seeking to understand or act on trends in the small business economy.
Comprehensive, Real-Time Measurement
The FSBI offers a highly detailed and current view of small business performance across the U.S., using real transaction data from approximately 2 million businesses. This includes card, cash, and check transactions, both in-store and online, providing a full spectrum of consumer purchasing behavior.
Unlike survey-based or sentiment-driven indicators, the FSBI is grounded in actual point-of-sale data, making it a reliable and timely barometer of economic activity in the small business sector.
Granular Insights Across Sectors and Regions
The index is available at national, state, and industry levels, covering 16 sectors and 34 subsectors, and can be filtered by geography or business type (using NAICS codes).
It allows users to drill down into specific regions, states, and even top metropolitan areas, providing insights into local economic conditions and sector-specific performance.
Benchmarking and Decision-Making Tool
The FSBI enables small business owners, lenders, policymakers, and industry analysts to benchmark performance, assess risk, and make informed decisions about investments, workforce planning, and legislative priorities.
Businesses can compare their own results to broader market trends, helping identify strengths, weaknesses, and opportunities for growth.
Inflation-Adjusted Measurements
The index now includes inflation-adjusted metrics, offering a more accurate picture of real economic activity and purchasing power. This helps distinguish between nominal growth (driven by price increases) and true increases in consumer demand.
By deflating sales data, users can better interpret whether growth reflects genuine momentum or is simply the result of higher prices.
Economic Indicator
The FSBI serves as a leading indicator for the broader U.S. economy, as small businesses are a significant driver of GDP and employment.
Trends observed in the index—such as shifts in discretionary versus nondiscretionary spending—can signal changes in consumer confidence, inflationary pressures, and overall economic health.
