Small Business Sales Flat in February
U.S. small business sales stabilized in February, with the Fiserv Small Business Index holding steady at 143. While bad weather drove foot traffic down, businesses were able to offset the decline with higher average ticket sizes, leading to a 1.2% year-over-year sales increase.
A major blizzard in the Northeastern United States from February 22-24, 2026, contributed to the decline in foot traffic for small businesses. The storm brought 1-2 feet of snow to a large portion of the megalopolis, with some areas receiving up to 3 feet. This historic winter storm, unofficially named Winter Storm Hernando, caused widespread impacts, including blizzard conditions and coastal flooding. The impact of the weather was not uniform across the country, with the Northeast experiencing the most significant disruption. For the second consecutive month, a major winter storm in the final week of the month dragged down sales in this region. Rhode Island and New York saw significant year-over-year sales drops as the blizzard severely limited travel. Despite the weather-related drop in in-person shopping, some sectors saw a boost in sales. Repair and Maintenance services increased by 1.5% year-over-year, while Health and Personal Care Retailers saw a 3.0% rise. Accommodations and hotels also experienced a 4.3% increase in sales compared to the previous year, likely due to weather-related travel disruptions. The trend of higher average ticket sizes offsetting lower foot traffic reflects a broader pattern of consumer behavior. Shoppers in early 2026 have been prioritizing value and necessary services over discretionary purchases. This shift has been influenced by persistent, though moderating, inflation and a focus on "cheap thrills" and essentials. Restaurant sales were flat year-over-year, with a 2.1% decline in foot traffic compared to the previous year. This suggests that some consumers may be cutting back on dining out. Within the restaurant sector, full-service establishments fared better, with a 1.4% year-over-year sales growth, while limited-service restaurants saw a 1.8% decline. The broader economic outlook for small businesses in 2026 is one of cautious optimism. Many business owners anticipate revenue growth, though they remain wary of economic uncertainty and rising costs. Economists project moderate growth for small business earnings, though likely at a slower pace than the overall economy. The annual inflation rate in the U.S. was 2.4% for the 12 months ending in January 2026, showing a decrease from the previous month. This cooling inflation, along with potential interest rate cuts later in the year, could provide some relief for small businesses facing cost pressures. Seasonal trends also played a role in February's sales figures. Professional Services, for example, saw a 4.2% year-over-year increase in sales. This growth was driven by increased pricing for services such as tax preparation, business services, and legal services, which are typically in higher demand at the beginning of the year.
