Small Business Sales Hold Steady
U.S. small business sales remained stable in February, with the Fiserv Small Business Index holding at 143. Year-over-year sales saw a modest 1.2% increase, as higher average ticket sizes compensated for declines in foot traffic.
A major blizzard in the Northeast, estimated to have caused between $34 billion and $38 billion in economic losses, was a significant factor in the decline of in-person shopping. This severe weather event led to widespread power outages for over 600,000 homes and businesses and the cancellation of more than 2,000 flights. For the second consecutive month, a major winter storm heavily impacted sales in the region, with states like Rhode Island and New York seeing significant year-over-year declines of 9.9% and 2.9%, respectively. The modest 1.2% year-over-year sales growth in February 2026 represents a slowdown from the 2.1% growth seen in February 2025. This aligns with a broader trend of more selective consumer spending, as households prioritize essential goods and services over discretionary purchases. The growth in average ticket size, which propped up the overall sales numbers, was driven by this shift towards needs over wants. Several sectors demonstrated resilience and even growth amidst the challenging conditions. Subsectors that saw a year-over-year sales increase due to the harsh weather included Repair and Maintenance (+1.5%), Health and Personal Care Retailers (+3.0%), and Accommodations/Hotels (+4.3%). Additionally, seasonal demand for services like tax preparation and legal services contributed to a 4.2% rise in the Professional Services category. The restaurant industry experienced a slowdown, with overall sales remaining flat compared to the previous year. A decline in foot traffic, down 2.1% year-over-year, was a primary contributor to this stagnation. A notable split emerged within the sector, as full-service restaurants saw a 1.4% increase in sales, while limited-service establishments experienced a 1.8% decline. Retail sales saw a slight year-over-year growth of 0.6%, even as foot traffic in stores decreased month-over-month. Consumers demonstrated a clear preference for value, with Food & Beverage stores seeing a slight decline in year-over-year sales despite an increase in foot traffic, indicating a shift towards more budget-friendly options. This trend of prioritizing value is being observed across all income levels. The current economic landscape reveals a "K-shaped" consumer recovery, where higher-income households are largely driving discretionary spending. Lower and middle-income consumers, facing tighter budgets, are increasingly focusing on essential spending. This bifurcation in spending habits is a key factor influencing the performance of different small business sectors.
