CardFlight Small Business Impact Report for June 3, 2020

While sales at small businesses were down 5.5% week-over-week, most of the downturn is attributable to the Memorial Day holiday.

Introduction

Last week, small business sales decreased by 5.5%. This is the first week-over-week decrease since the week of April 20–26, but the decrease is almost entirely attributable to the Memorial Day holiday.

All of the three major business categories we track in this report were affected. Week-over-week sales at food and drink businesses decreased by 6.5%, retail sales went down by 1.8%, and sales at services businesses dropped 6.5%. Although overall sales were down, transaction counts remain near baseline levels, now 0.9% below the week of March 2–8.

Looking back over the month of May, sales at small businesses were up 27.1% and transactions were up 56.1% month-over-month.

A note about the Memorial Day holiday

Monday, May 25, was the Memorial Day holiday in the US and our data show that the week of May 25–31 was impacted by lack of business activity on the holiday. Total sales for were down nearly 75% and transaction counts were down 50%, compared to the preceding Monday (May 18).

We estimate that the Memorial Day holiday caused a 13.3% impact to weekly dollar sales and a 7% impact to weekly transaction counts. Adjusted for this estimate, total sales would have been up 7.1% week-over-week and transaction counts would have been up 3.2%. The remainder of the report reflects actuals for the past week compared to our usual baseline week of March 2–8, without adjustments for the impact of Memorial Day. Learn more about our methodology.

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 31, 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 down 5.5% last week

Week-over-week sales at the small businesses in our sample dropped 5.5% from May 25–31, after four consecutive weeks of growth. Overall sales are now within 1% of the baseline week of March 2–8, 2020.

Transaction counts down 3.6% last week

The total number of transactions in our sample fell by 3.6% over the previous week, primarily due to lack of business activity on Monday, May 25. Based upon the decrease, transaction counts are now below the baseline week by almost 6.0%. However, they are well above the low point of March 23–29.

Growth in active small businesses stable last week

The number of active small businesses (measured as all businesses who processed at least one transaction in the previous week) was essentially unchanged: up 0.5%. The number of active merchants has rebounded to 11.8% below the baseline week, compared to the low of nearly 30% we reported in mid-April.

The average number of transactions per active merchant was down 4% last week. However, the average transaction per merchant metric remains above the baseline week of March 2–8 by nearly 7%.

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 down 6.5% last week

Week-over-week sales at food and drink businesses decreased by 6.5% last week, and are now up just 0.6% over the pre-COVID baseline of March 2–8, 2020.

However, transaction counts in the food and drink category increased by 1%, and remain 17.3% above the baseline.

Volatile retail sales continue

The retail businesses in our sample saw sales decline by 1.8% last week, after a decline last week of 9.8%. Sales in this category are now down 5.3% over the baseline week of March 2–8, 2020.

Transaction counts in the retail category were down 10.3% week-over-week, and are now down 15.2% from the baseline week.

Sales at services businesses down 6.4% last week

Businesses in the services category dropped 6.4% last week, reversing last week's uptick of nearly 12%. Sales in this category are now just 5.6% below the baseline week of March 2–8, 2020.

The number of transactions in the services category remained stable week-over-week, up 0.3% and continue to be at nearly 18% below the baseline week.

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 31, 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.