January was a strong month for small businesses thanks to stable consumer demand and cooling economic concerns, according to the latest Fiserv Small Business Index report.
Despite marking the close of the holiday season, January’s small business sales were nearly identical to December’s, rising only 0.1%. On a year-over-year basis, last month’s sales were 1.7% higher than in early 2023.
While consumer demand was flat from December, small business patronage varied between sectors. Expenditures on insurance, building materials, DIY projects, and accommodations outpaced other areas in January. Meanwhile, spending on apparel, food service, personal services, and specialty trade contractors fell.
Small businesses in the retail sector performed exceptionally well in January. Consumer demand in the segment outpaced other areas, with sales rising 0.7% from December and 1.9% from January 2022. Conversely, restaurants saw a sharp dip in overall performance, with spending falling 4.1% month-over-month and 1.9% year-over-year.
Despite the varied outcomes, January proved to be a strong month for small business performance. The post-holiday period serves as a benchmark for the rest of the year, helping companies estimate how consumer demand will fare in the absence of seasonal deals. Given the near-flat month-over-month sales rate, entrepreneurs can face the rest of 2024 with more confidence.
