U.S. Small Business Recovery Gradually Increases but Minnesota Experiences Hit Following First Week of Protests, According to New Fivestars Data

According to Fivestars, a small business payments and customer loyalty platform, small business spending nationwide is continuing on a slow and steady recovery, with southern states experiencing a slightly higher than average increase in weekly sales compared to the overall U.S. average. Additionally, the company is already reporting a significant decline in small business sales over the last week in Minnesota, a state that has been the epicenter of nationwide protests. 

According to Fivestars’ fourth weekly Small Business Reopen Report, Florida is recording strong sales growth, down 25% compared to this time last year, as is Texas, down by 38% compared to this time last year. As demonstrated by previous Fivestars’ reports, California continues to trail behind due to more conservative reopening plans, and is still down 54% compared to this time last year. 

Minnesota Sales Impacted as State Experiences Days of Protests 
As protests erupted across Minnesota last week over the killing of George Floyd, small businesses experienced a significant hit on sales. According to Fivestars’ data, Minnesota saw a 13% decrease in overall sales compared to the week prior, more than any other U.S. state. 

The data demonstrates a significant hit for the state compared to the week of May 18th when Minnesota experienced rapid sales growth, reaching a 75% recovery rate compared to pre-shelter-in-place sales. However, over the past week, the state of Minnesota has lost a third of that recovery.

“First, small businesses were hit with COVID-19, and now, they’re at risk of experiencing loss of gains due to the effects of widespread protests across the country,” says Victor Ho, Founder & CEO of Fivestars. “It’s too early to tell if these protests will have lasting effects across the country, but this is hitting small businesses at the worst time, after they’ve already been weakened by months of depressed sales. It’s particularly worrisome as shoppers were just showing signs of being willing to venture outside and revitalize their neighborhood businesses again.”

Through its Small Business Reopen Report, Fivestars will continue to look at sales data week by week for states across the U.S. in order to develop a better understanding of how nationwide protests are directly impacting small businesses. 

States Experience Slow Recovery Rate Overall but Entertainment Activities Witness Big Jump 
As some states across the nation began lifting restrictions on museums, parks, limited performances, and more, Fivestars’ data shows that even though businesses within these verticals have a long way to go, consumers are flocking towards entertainment activities after weeks of being under shelter-in-place. 

Most notably:

• Arts & entertainment businesses saw a 59% increase in sales nationwide compared to last week but are still down by 71% compared to last year 
• Video game brick & mortar stores saw a 57% increase in sales nationwide compared to last week but are still down by 75% compared to last year 
• Comic and book stores saw a 26% increase in sales nationwide compared to last week but are down 47% compared to last year  

Furthermore, Americans continue to find ways to pass time, such as partaking in outdoor activities, as sporting goods sales are up 13% compared to last week, and bike shops across the country experience a 20% surge compared to last week, with a significant sales increase of 68% compared to this time last year. In fact, bike shops are the only small business vertical on the Fivestars platform that has experienced consistent growth compared to last year throughout the pandemic.

Overall, apparel is recovering fairly well nationwide at a 10% increase compared to last week, with California experiencing a 63% increase in sales after the state began easing restrictions last week. Restaurants and beauty services are having a tougher time getting back on their feet, tallying a 4% and 6% week over week increase respectively. However, as some counties in California began allowing beauty and nail salons to reopen, the state witnessed a 157% increase in sales compared to the week prior, but is still significantly down by 82% compared to last year. 

Last week’s report saw small business spending nationwide increase by 14% compared to the week prior, putting the nation at a 55% recovery rate compared to the same time last year, with Florida outperforming other states in terms of speed of economic recovery. The report also found that bike shop sales surged nationwide, up 78% compared to last year while restaurants continued to take a hit, down by 54% compared to last year. 

To learn more about Fivestars, visit www.fivestars.com. 

About the Study
Fivestars analyzed millions of data points from its platform from May 25-31, 2020 compared to May 18-24, 2020, and from this week compared to the same week in 2019, representing customer traffic and sales at over 14,000 merchants nationwide. The weekly report, titled “Small Business Reopen Report,” reveals a number of insights into the economic impact of reopening small businesses. 

About Fivestars
Fivestars is one of America’s largest local commerce platforms. Founded in 2010 by former McKinsey analysts Victor Ho and Matt Doka, the company’s mission is to help local businesses turn every transaction into a relationship. The company offers a robust payment and customer loyalty platform, enabling local businesses to increase customer retention, driving sales. For more information visit: www.fivestars.com.
 
 

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