CardFlight Small Business Impact Report: April 8, 2020

Transactions increased by 5.7% during the first week of April. The rate of small businesses closing their operations also decreased.

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Introduction

‍Coronavirus and COVID-19 have dominated the nation’s attention, with the World Health Organization declaring the situation a pandemic on March 11, 2020.

As of this report, disruptions in society and communities continue to rapidly change and expand. At CardFlight, we are closely monitoring the developing situation and its impacts. This report is intended to provide insights into the impacts of coronavirus/COVID-19 on small businesses across the United States.

In this week's report:

Methodology

To create this report, we analyzed a representative sample of hundreds of thousands of transactions processed from March 2 to April 5, 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.

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Overall week-over-week sales didn't decline

Sales at the small businesses in our sample were flat compared to the prior week, making this the first week without a decline over the baseline week since we began the Small Business Impact Report. Actual sales volume was up 0.7% over the prior week.


Number of transactions up 6% week-over-week

The week of March 30 to April 5 marks the first time since we started the Small Business Impact Report that the number of transactions increased, a hopeful sign in the midst of an unprecedented slowdown in sales for small businesses. 

While it's too early to know if this is the start of a longer-term trend or a short-term blip, we believe it does indicate how some merchants are adapting to a new reality.

The data show: 

  • Number of transactions at small businesses are up 5.7% over last week
  • Sales were flat over the preceding week
  • This is the first week since March 2, 2020 in which sales did not fall over the prior week

Average transaction amount also steady

The size of a typical transaction at the small businesses in our sample also remain relatively unchanged over the baseline comparison week (March 2–8, 2020). 

We believe this is because some essential needs have remained the same, although consumer spending patterns have changed significantly in certain ways.

Derek Webster, CardFlight founder and CEO, spoke to Bloomberg TV last week: “The $500 emergency plumbing repair job is still happening, but that $12 glass of wine is not.”


Increase in transaction volume and merchant reactivation

We saw a positive shift in payment volume for the first time since March 2. The number of transactions per merchant increased 6.6% from the prior week.

While the data still show that more than a quarter of small businesses have not transacted since the baseline comparison week of March 2–8, the decline slowed considerably last week over the prior week to less than 1%.


Week-over-week sales increases in food and drink and services

Two merchant categories registered an increase in week-over-week sales: Food and drink and services.


Food and drink establishments

Sales at food and drink establishments increased by 22% week-over-week, a marked improvement over the preceding weeks. This shows the resilience and ingenuity of food and drink small businesses, as they close their doors for dine-in customers and pivot to different models such as curbside pickup, deliveries, meal kits, and recurring delivery plans. While this was a bit of recovery, sales in this category are still down by 23% compared to the baseline week.

Service providers 

The service providers category includes small businesses such as general contractors, healthcare providers, and professional services providers. This category registered a 4.2% increase in sales over the prior week.

Retail 

The week of March 30–April 5 was another week of a steady decline in sales for the retail category, comprising sporting goods stores, specialty retail, home furnishings, automotive, and others. This type of small business saw a 31% decline since the baseline week of March 2, making it the hardest hit sector over the scope of our report.


Deep dive: Merchant category

As more businesses find ways to serve their customers while respecting social distancing recommendations, sales rose over the previous week.

Clothing services, including businesses like dry cleaners, laundromats, tailors, and seamstresses saw a 77% increase in sales, although sales are down 61.9% when compared to the baseline.

Entertainment and recreation businesses — which includes dance studios, membership sports and clubs, and recreational camp programs — also registered an increase over the previous week, with sales up 71%.

Here’s a snapshot of positive week-over-week change in sales by merchant type:

Change in sales: Modest increase in rural areas

Next we examine how urban density affects the change in sales due to coronavirus/COVID-19. We break down urban density into four buckets:

  • Large cities: Metropolitan areas with a population of 5 million and above
  • Medium cities: Populations of 1-5 million people
  • Small cities: Urban areas with fewer than 1 million people
  • Rural areas

Last week, we reported that sales in rural areas were down more than in large urban areas (31% decrease for rural areas, compared to 22.5% for large metros).

This week, we found that sales in rural areas experienced a slight uptick, up 4.3% week-over-week and 9.3% last week compared to the baseline.

Meanwhile, sales in urban metros continued to fall, down 25% in large cities and 27% in medium cities when compared to the baseline week of March 2–8.

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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