This week's Small Business Impact Report starts off with encouraging news: Sales at small businesses were up 11.1% last week—just 12.6% below our baseline week of March 2–8, 2020. Last week (April 27 – May 3) also delivered the largest weekly increase in total average transaction counts (+19%) since our baseline comparison week.
The weekly growth in sales was driven by increases in all three small business categories: food and drink, retail, and services. Read on for more analysis of the sales activity in these three key categories, the changing impact of COVID-19 on sales at small businesses, and more.
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 one million transactions processed from March 2 to May 3, 2020 by 60,000 small businesses who use CardFlight’s SwipeSimple software to accept credit and debit card payments. Learn more about our methodology.
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 grew consistently throughout the month of April, ending the month just 12.6% below the baseline week of March 2–8, 2020.
We've reported positive sales for three of past four weeks (April 6–May 3) — and this week’s sales at small businesses were 23.4% above the low we recorded in the week of April 6–12.
At 19.1%, April 27–May 3 was the biggest seven-day stretch of growth in transaction counts we've seen since the low point documented in the Small Business Impact Report for March 23–29.
Transaction counts grew consistently throughout April, recovering a total of 63.6% from the low point at the end of March. As of this week, transactions are down 23.2% below the baseline week.
Last week, 6.3% more small businesses posted transactions this week than the preceding — the biggest week-over-week increase since the baseline week of March 2–8.
This week's increase was realized by all three categories of small businesses we track:
Read on for more in-depth analysis of change in sales and transaction counts among these three key categories.
Despite three consecutive weeks of growth in this metric, the total number of active small businesses (measured by any business that posted more than one transaction) is down 21.1% since the baseline week.
The average number of transactions per active merchant was up 12% week-over-week. The average transaction count per merchant has almost completely rebounded, down just 2.7% over the baseline week of March 2–8. For small businesses that are open, they seem to be regaining a certain level of efficiency, even if sales volumes remain below pre-COVID levels.
In this section of the CardFlight Small Business Impact Report, we take a closer look at small business performance by business category:
Looking back over two months, the data across each business category show a distinct low point that roughly aligns with the timing of initial local shutdown or social distancing regulations.
The food and drink category was hit hardest by coronavirus/COVID-19 and initial orders for consumers to stay at home. Overall, sales decreased 36.9% below our baseline by the week of March 23, as bars and other food and drink businesses (excluding bars) saw average daily sales fall as low as half of the baseline.
Since mid-April, independently-owned restaurants and specialty food and drink purveyors have experienced three consecutive weeks of increasing sales. Last week’s increase was 13.4%, returning the sector to its baseline sales numbers.
Transaction counts have increased at an even higher rate: up every week for the past five weeks. Last week, transaction counts were up 13%, which contributed to the 51.8% rebound in transactions since the week of March 23–29.
The week of April 6–12 was the low point for the retail businesses in our sample: Sales were down 32.5% compared to the baseline week of March 2–8. Although still a large decrease in sales, it makes the retail category the least impacted by the stay-at-home mandates that have largely been in place over the last two months.
While sales in this category are still volatile week-to-week, April delivered four weeks of growth, and sales are up 13.7% week-over-week. Retail sales are up nearly 25% since their low point in early April, and ended the week down just 15.8% below the baseline week.
Transaction counts at retail businesses have increased more steadily, and were up 24.3% last week, contributing to 69.3% rebound since the low point week of March 30–April 5.
Sales in the services sector hit their low during the week of April 6–12. Since then, sales have increased steadily, including the biggest single-week increase we've recorded in our report, up 10.5% week-over-week. Since early April, sales at services businesses have increased by 25.3%, ending April at 20.6% below the baseline week.
Last week, transaction counts within services businesses grew 18.7%, resulting in a 35.3% rebound since the week of March 23–29.
When we released the first CardFlight Small Business Impact Report analyzing sales over the week of March 2–8, 2020, 42 states had formal shutdown or shelter-in-place restrictions in effect. Over the past two months, we’ve documented the significant economic impact on small businesses, and have seen indications of business owners responding to and adapting to these environmental changes.
Sales at certain small businesses have remained fairly stable during the base two months, staying within +/- 20% over the past two months. All percentage-point changes below are over the baseline week of March 2–8. 2020.
The following businesses saw sales decrease the most relative to other businesses in our sample, but have now seen an increase in sales over three of the past four weeks. All percentage-point changes below are over the baseline week of March 2–8. 2020.
The following businesses saw a sharp decline in sales initially, but have seen sharp increases over the past two weeks and could be poised to grow rapidly in the weeks ahead:
As of May 6, 2020, 13 states are in the beginning to phase out social distancing restrictions and are reopening small businesses, with another five states close behind. Here at CardFlight, we'll continue to monitor the impacts of coronavirus/COVID-19 on small businesses, with a particular emphasis on signs of developing sales impact and/or stabilization as more states open.
For more about our predictions for the post-COVID world of small businesses, read our latest blog post: 10 predictions for the post-COVID world of small businesses.
To create this report, we analyzed a representative sample of millions of transactions processed from March 2 to May 3, 2020, by:
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 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.