U.S. Small Businesses Recovery Rate 63%, up 52% from Four Weeks Ago, as Local Sales Continue to Climb, According to Fivestars Data

According to Fivestars, a small business payments and customer loyalty platform, small business spending nationwide is continuing despite ongoing challenges, such as the COVID-19 pandemic and widespread protests. National small business sales are now at 63% of what they were at this time last year, demonstrating gradual but encouraging growth. The total U.S. sales are now up 52% compared to the first report issued by Fivestars in early May 2020.

According to Fivestars’ fifth weekly Small Business Reopen Report, small businesses in the midwest experienced significant sales growth this week. Additionally, data suggests that southern states are maintaining their lead in overall recovery rate, with Mississippi and Tennessee sales nearing pre-pandemic levels. For the fourth consecutive week, small business recovery rates in Florida and Texas have been steady - Florida is nearly 80% recovered, with Texas not far behind at 67%. In contrast, west coast states like California continue to trail lower than the national average, with sales down 52% compared to this time last year.

This Week, Small Business Sales in The Midwest Spearhead The Nation’s Gradual Recovery 
As protests over the killing of George Floyd continued into its second week, many small business owners braced for a potential decline in sales. Minnesota, the epicenter of protests, saw a 13% decrease in overall sales the first week of the protests, losing a third of their recovery progress since stay-at-home orders were lifted. However, new data from Fivestars unveils that just a week later, the state is back on track, rebounding with a 32% increase in sales compared to the week prior.

While the midwest still has a ways to go to reach complete recovery, these states are showing promising sales growth:

• Michigan: sales down 48% from this time last year, but up 38% since last week
• Minnesota: sales down 36% from this time last year, but up 32% since last week
• Illinois: sales down 46% from this time last year, but up 29% since last week

“Our report last week showed early signs of a potential negative impact from nationwide protests on small local businesses, many of which had already taken a hit from COVID-19,” said Victor Ho, Founder & CEO of Fivestars. “But over the past week, we’re continuing to see the economy as a whole recover. In fact, we may not see any lasting impact of these protests on the overall recovery rate of small businesses.”

Shelter-in-Place Restrictions Will Lift, But Changes in Customer Shopping Habits Could Linger 
Fivestars data shows even though states lift shelter-in-place restrictions, niche verticals are maintaining consumers’ attention. Active life store sales soared 30% since last week, with sporting good stores not far behind at an 18% increase. Most notably, bike shops on Fivestars’ platform continued their consistent growth, seeing a 108% increase in sales since this time last year.

As states enter the final phases of their reopening plans, the majority of  small business verticals still struggle to regain pre-pandemic traction:

• Arts & entertainment businesses sales decreased 4% compared to last week, and are down 71% from this time last year
• Nightlife business sales increased 10% compared to last week, but are down 69% from this time last year
• Drink shops (juice & smoothies) sales increased 7% compared to last week, but are down 59% from this time last year
• Restaurants sales increased 11% compared to last week, but are down 51% from this time last year

Last week’s report saw small business spending continue to increase nationwide, putting the nation at a 58% recovery rate compared to the same time last year. But with nationwide protests emerging, the report found a negative impact in states like Minnesota, who saw a 13% decrease in overall sales compared to the week prior, more than any other U.S. state. Florida and Texas lead the economic recovery, with states like California trailing significantly behind.

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

About the Study
Fivestars analyzed millions of data points from its platform from June 1-7, 2020 compared to May 25-31, 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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