Consumers increased their spending at small businesses in July, driven by strong sales in general merchandise and health and personal care products. The Fiserv Small Business Index climbed 1 point to 141 after a 4 point drop in June. This index is calculated from point-of-sale transactions, encompassing card, cash, and check transactions both in-store and online across approximately 2 million U.S. small businesses.

Jennifer LaClair, the head of merchant solutions at Fiserv, commented, “Following modest declines in June, consumer spending rebounded nicely in July to help many small businesses start the second half of the year strong.” In comparison to July last year, sales surged by 3.5% and the number of transactions increased by 3.3%.

Prasanna Dhore, the chief data officer at Fiserv, noted, “Consumer spending patterns continue to shift, with retail spend experiencing a significant rebound compared to June.” Retail spending escalated by 4.6% and retail transactions saw a 5.8% spike. Among categories, general merchandise showed the strongest growth, up by 10.9%. Sales of health and personal care products rose by 8.6%, building materials and garden products increased by 6.2%, food and beverage sales went up by 4.9%, and furniture, electronics, and appliances sales saw a 4.7% growth.

On the downside, restaurant sales fell by 1.6% despite a slight increase in foot traffic by 0.7%. Consumers dining out also witnessed a notable drop in the average check size, down by 2.4% compared to July 2023. It remains uncertain whether the decrease stemmed from lower prices or diners ordering less.