Fiserv Inc. Reports Stabilized Small Business Index Amidst Cautious Consumer Spending

The October report indicates a year-over-year sales growth of 1.5% and a transactions increase of 1.1%. However, these figures represent the slowest annual sales growth rate since February 2025. Month-over-month, sales and transactions both experienced slight increases of 0.1% compared to September 2025. When factoring in inflation, small business sales actually declined by 1.4% year-over-year, marking the steepest drop in the last eight months.

“Consumers continued spending cautiously in October, pulling back significantly at restaurants and across many discretionary categories,” commented Prasanna Dhore, Chief Data Officer at Fiserv. “Small retailers, however, did see an uptick in sales – a positive indicator as these businesses move deeper into the holiday shopping season.”

Retail sales for small businesses showed a month-over-month growth of 0.7% and a year-over-year increase of 0.6%. Notably, core retail sales, which exclude more volatile categories, performed even better, with a 1.6% month-over-month rise and a 2.6% year-over-year increase. The report highlights significant monthly sales growth in discretionary categories such as Sporting Goods (+3.0%) and Clothing (+1.9%), driven by early holiday promotions. Additionally, food and beverage sales saw a month-over-month increase of 1.4%, attributed to higher foot traffic and average ticket sizes.

Despite the overall growth in retail sales, discretionary spending remains sluggish. Year-over-year discretionary spending only rose by 0.2%, while essential sales grew at a faster pace of 2.5%. This widening gap indicates a shifting consumer focus toward necessary purchases. Month-over-month, discretionary spending remained unchanged, while essential purchases increased modestly by 0.4%.

The restaurant industry, in particular, continues to face challenges. October sales saw a minimal year-over-year increase of 0.1%, but there was a month-over-month decline of 0.3%. Bars and pubs recorded a decrease in both foot traffic (-0.5%) and sales (-0.1%) compared to September. Full-service restaurants struggled with a month-over-month sales drop of 0.1%, accompanied by a slight decline in foot traffic of 0.2%. However, average tickets for these establishments did experience a modest growth of 0.2%. Quick-service restaurants also reported a downturn, with month-over-month sales down by 0.6% and foot traffic decreasing by 0.8%, despite a 0.2% rise in average ticket size.

The Fiserv Small Business Index is unique in its approach, aggregating consumer spending activity directly from point-of-sale transaction data rather than relying on surveys or sentiment analyses. This index encompasses approximately 2 million U.S. small businesses, including those using the Clover point-of-sale and business management platform. By benchmarking against 2019 figures, the index provides a clear numeric value for consumer spending, along with a transaction index measuring customer traffic across various regions and business types.

As Fiserv’s latest Small Business Index indicates, while there are pockets of growth, particularly in small retail and essential categories, the overall consumer landscape remains cautious. With small businesses bracing for the holiday shopping season, the focus on essential purchases over discretionary spending presents both challenges and opportunities. As the year progresses, monitoring these trends will be crucial for understanding the dynamics shaping the U.S. small business economy.

For more detailed insights, the full Fiserv Small Business Index can be accessed on their official website.