CardFlight Small Business Impact Report for May 28, 2020

Sales up 12% last week, the largest week-over-week increase since early March.

Introduction

Over the past week (May 18–24), small business sales increased 5.2% over the previous week. For the first time since we’ve been reporting this data, sales have exceeded the baseline week. This past week, sales were 4.9% above the week of March 2-8.

Sales performance across the major business categories were mixed. From the previous week, Food and drink increased by 4.2% and Services increased by 11.2%. Retail sales, however, were 9.3% below the previous week.

Key takeaways from this week’s report

About this report

The CardFlight Small Business Impact Report is intended to provide insights into the impacts of coronavirus/COVID-19 on small businesses across the United States. The report has been featured in and/or cited by The Atlantic, Bloomberg TV, Business Insider, Digital Transactions, and others.

The report is based on analysis of a representative sample of over two million transactions processed from March 2 to May 24, 2020 by more than 60,000 small businesses who use CardFlight’s SwipeSimple software to accept credit and debit card payments. Learn more about our methodology.

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Week-over-week changes

First we examine how coronavirus/COVID-19 is affecting small business sales by analyzing change in overall sales, number of transactions per business, and more.

Sales at small business grew 5.2% last week

Week-over-week sales at the small businesses in our sample were up for the fourth consecutive week. Overall sales are now up over the baseline week of March 2–8 by nearly 5%.

Transaction counts up 7.4% last week

The total number of transactions in our sample increased for the sixth consecutive week, up 7.4% week-over-week. Compared to the baseline week of March 2–8, transaction counts are now down by 2.4%.

Active small businesses up 2.5% last week

The number of active small businesses (measured as all businesses who processed at least one transaction in the previous week) was up again last week. The number of active merchants is now down 12.2% from the baseline week, compared to the low of nearly 30% we reported in mid-April.

Both the food and drink and services business categories drove this week's increase; active merchants were up up 4% and 3.8% respectively.

The average number of transactions per active merchant was up nearly 5% week-over-week. The average transaction per merchant metric is now above the baseline week of March 2–8 by more than 11%.

Deep dive: Sales by business category

In this section of the CardFlight Small Business Impact Report, we take a closer look at small business performance by business category:

  • Food and drink establishments: Includes bars and restaurants
  • Service providers: General contractors, healthcare providers, providers of professional services, and others
  • Retail: Businesses like sporting goods stores, specialty retail, home furnishings, and automotive

Sales at food and drink businesses continue to grow

Week-over-week sales at food and drink businesses increased by 7.6% last week, maintaining a healthy margin above the sales numbers seen during the baseline week of March 2–8, 2020.

The number of transactions among food and drink businesses are now up 16.2% over the baseline week, posting gains for the eighth week in a row.

Retail sales decline 9.3% after three weeks of growth

The retail businesses in our sample saw sales decline by 9.3% last week, this category's first sales decline since the week of April 20–26. Sales in this category are now down 3.6% over the baseline week of March 2–8, 2020.

While sales were down week-over-week, the number of transactions was up 4.7% and are now 5.4% below the baseline week.

Sales at services businesses up nearly 12% week-over-week

Businesses in the services category claimed the biggest percentage-point increase of the three primary business categories we track last week, up 11.9% last week. This sales increase brings the services category to positive sales growth territory for the first time since March 2–8, up almost 1%.

The number of transactions in the services category also increased 7.2% week-over-week, but are still down by 18% over the baseline week.

Business outlook

In this section, we classify business change by three different measures.

Businesses with the largest gains last week

  • Health and beauty spas: Sales up 47.2% over the previous week; now 33.2% below the baseline week of March 2–8
  • Entertainment and recreation: Sales up 23.7% last week; now 26.9% above the baseline week
  • On-site technical services: Sales up 14.6% week-over-week; now 27.9% above baseline week
  • Salon and barbershops: Sales up 14% over the previous week; now 36% below the baseline week


Business categories with steady gains since their low point:

  • Food and drink: Sales up 7.6% above the baseline
  • Healthcare: Sales now 10.4% below baseline

A note about the businesses in our sample

Given the nature of small businesses as whole, at any time, there is a fair amount of new business formation and closures. The analysis below is our attempt to separate net changes in small-business activity from any pandemic-related market share shifts towards SwipeSimple. Learn more about our the SwipeSimple portfolio and our methodology for this section.

For the data tables on which the charts above were made, view the spreadsheet.

Thanks for reading the CardFlight Small Business Impact Report

Do you have questions, feedback, or press inquiries? Contact us. You may also view past editions of the CardFlight Small Business Impact Report.

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Our methodology

To create this report, we analyzed a representative sample of millions of transactions processed from March 2 to May 24 2020, by:

  • 60,000 small businesses 
  • in all 50 states 
  • using CardFlight’s SwipeSimple software to accept credit and debit card payments

This report can be useful in understanding the impact of COVID-19 on small businesses at a hyper-local perspective and across the US. It is updated on a regular basis tracking specific indicators including: shifts in consumer spending among local businesses; impacts across different industries, and across cities and states. 

The SwipeSimple small business owner 

The typical SwipeSimple merchant has one to ten employees and less than five locations or mobile service points. The average active merchant represented in this data set processes approximately $130,000 in credit/debit card payments annually. The merchants are a mix of professional and personal service providers, specialty retail establishments, and food and drink purveyors.

The SwipeSimple portfolio

Given the nature of small businesses as whole, at any time, there is a fair amount of new business formation and closures. The analysis below is our attempt to separate net changes in small-business activity from any pandemic-related market share shifts towards SwipeSimple.undefined

Due to the versatility of our product offering, these shifts occurred by existing small businesses adding SwipeSimple to their payment environment in order to quickly adapt to new service and delivery methods.

To better assess the representative nature of the metrics in our sample, we compared our business activity from March through May 2020 with the same period in 2019, and used the 2019 period as a baseline for the typical contribution towards total small business sales of newly processing merchants. We used this to create an adjusted business formation estimate that attempts to remove bias from any pandemic-related market share gains.

While we will continue to report based upon the SwipeSimple portfolio, we added additional analysis to compare the actual SwipeSimple portfolio with our projection for all small businesses.

The charts above reflect our projection for how small businesses have performed according to the baseline week, based on:

  • SwipeSimple portfolio: Reflects all transactions processed by US small businesses using SwipeSimple for a given week. This is the same methodology for all other charts in this report.
  • Same-store sales: Reflects all transactions processed by US small businesses using SwipeSimple for a given week, only including merchants that were active prior to March 9, 2020.
  • Projection for all small businesses: Reflects actual transactions from merchants in the same-store sales group, plus an imputed amount of transactions from new merchants at the lower 2019 growth levels, to remove the impact of share shift during 2020 due to pandemic-related reasons.