Fiserv Small Business Index: February 2025 Report Highlights Growth in Retail and Restaurant Sales
Fiserv, a leading global provider of payment and financial services technology, has released the Fiserv Small Business Index for February 2025. The seasonally adjusted index remained stable at 147, unchanged from January, indicating steady economic activity among small businesses. While total spending growth remained nearly flat compared to the previous month, sector-specific trends revealed a shift in consumer spending toward retailers and restaurants, while service-based businesses experienced a slowdown.
According to Prasanna Dhore, Chief Data Officer at Fiserv, “Consumer spending continued to demonstrate resilience in February, leading to the second consecutive month of small business sales growth in 2025. Notably, sectors such as Restaurants, Furniture, Auto Parts, Clothing, and Health Care witnessed increased sales during the month.”
Year-Over-Year and Month-Over-Month Trends
On an fiserv annual basis, small business sales saw a 2.1% increase, while total transactions rose by 4.0%. Month-over-month figures showed slight growth, with sales rising by 0.1% and transactions increasing by 1.6%.
For the first two months of 2025, combined sales growth was recorded at 3.5%. However, this represents a decline of 1.5 percentage points compared to the same period in 2024. The slowing growth can be attributed to a decrease in the average ticket size, even as transaction growth remained steady.
Retail Sector Shows Strength in February
Consumer fiserv demand for retail products continued to be robust. Retail sales among small businesses increased by 1.6% year over year, while transactions grew by 1.2%. This was the first time since January 2023 that retail ticket sizes recorded an increase, rising by 0.4%.
General Merchandise stores led the year-over-year growth in retail sales with a 7.3% increase, followed by Clothing stores (3.7%) and Sporting Goods/Miscellaneous Retailers (3.6%).
On a monthly basis, retail sales rose by 0.9%, with transaction growth remaining stable. Notably, Motor Vehicle and Parts Dealers saw a sales increase of 3.1%, while Furniture, Home Furnishings, and Electronics retailers experienced a 5.0% boost. However, consumers scaled back spending in Grocery, Health and Personal Care, and Gasoline stations.
Restaurant Sales Rebound from January but Face Challenges
The restaurant industry exhibited mixed performance in February. fiserv While overall sales at small business restaurants declined by 2.4% year over year, foot traffic, as indicated by transaction volume, increased by 5.9%. This suggests a continuing trend of consumers opting for lower-cost dining options rather than reducing dining-out frequency.
On a monthly basis, restaurants rebounded with a 2.3% rise in sales and a 3.9% increase in transactions compared to January. However, the average ticket size declined by 1.6%, reinforcing the notion that customers are prioritizing affordability over premium dining experiences.
Service Sector Faces Slowdown
As consumer spending shifted toward retail and dining, service-based businesses encountered a slowdown in February. Year-over-year growth in the service sector stood at 2.3%, but month-over-month figures showed a slight decline of 0.2%.
Among service categories, Professional Services saw the highest annual growth at 8.7%, followed by Religious, Civic, and Professional Organizations (7.0%) and Truck Transportation (7.0%). Meanwhile, Equipment Manufacturing (-9.3%), Rental and Leasing Services (-5.9%), and Transit and Ground Passenger Transportation (-5.2%) experienced the most significant declines.
Month-over-month, the strongest-performing service sectors included Hospitals (+1.8%), Personal and Laundry Services (+1.6%), Ambulatory Health Care Services (+1.5%), and Educational Services (+0.7%). Conversely, Information Services (-2.6%) and Administrative Services (-2.3%) saw the largest monthly sales declines.
Regional Performance: Growth Concentrated in the South and Midwest
Certain states experienced strong year-over-year sales growth, with North Dakota leading at 11.8%, followed by Georgia (10.6%), South Carolina (8.6%), Minnesota (7.0%), and Virginia (6.2%). Month-over-month, North Dakota also posted the highest growth at 8.8%, trailed by Louisiana (5.7%), Texas (4.3%), Indiana (4.0%), and Alabama (3.6%).
Among large metropolitan areas, Atlanta recorded the highest year-over-year sales growth at 14.4%, with Miami following at 5.3%. Conversely, the New York metro area experienced a 5.7% decline in annual sales. Monthly trends showed that Dallas had the strongest sales growth (+4.6%), followed by Atlanta (+3.2%) and Philadelphia (+1.2%).
Key Takeaways
- Consumer spending remained resilient, supporting small business sales growth for the second consecutive month.
- Retail sector performance was strong, led by General Merchandise, Clothing, and Sporting Goods.
- Restaurant sales rebounded month-over-month, but consumers continued to seek lower-cost dining options.
- The service sector faced headwinds, with some categories experiencing sales declines.
- Regional performance varied, with southern and midwestern states showing the strongest growth.
Looking ahead, small business performance will likely continue to be influenced by shifts in consumer preferences, inflationary pressures, and broader economic trends. The Fiserv Small Business Index will continue to monitor these developments in the coming months.
