Consumer Spending Slows Summer

Small business sales growth slowed in June as consumers generally spend less in the summer. However, sales are still up compared to this time last year.

The data comes from payments service provider Fiserv, which analyzes point-of-sale purchase data from small businesses to track sales trends for its monthly Small Business Index.

According to the Index, sales fell four points from May to June, with a 2.9 percent drop in overall sales. Fiserv found that the biggest declines came from personal sectors such as retail, restaurants and residential. However, spending has increased in other areas, such as rising insurance premiums and digital subscription models.

Prasanna Dhore, Fiserv’s chief data officer said in a statement, “As the quarter draws to a close, consumers have pushed back cash and foot traffic across businesses, restaurants and other service-based businesses.”

It is common for consumer spending to drop during the summer. Therefore, this finding is not new to older small business owners.

However, it is a good idea for businesses to understand these trends as they relate to things like consumer churn and foot traffic. If you’re just starting out, then a clear picture of what you can expect throughout the year can help you plan for various expenses, income, and marketing opportunities.

For example, summer may be an ideal time for retail businesses to participate in events or try unique promotions to increase foot traffic. Some businesses may even find that slowing down for a few months may help them better prepare for the busy fall and winter seasons.

Each business may have slightly different experiences and prioritize different goals. So carefully consider how your annual goals can fit into the slow season and make the most of this time if the sales slump affects your industry.

Photo: Envato