Southern States Lead U.S. Small Business Recovery, According to New Fivestars Data

According to Fivestars, small business spending nationwide increased 14% since last week and the nation is now at a 55% recovery rate. The data shows interesting findings between states that are ramping up reopening and those that are working off a more conservative phased approach, and also highlights the types of small businesses Americans are flocking towards. 

According to Fivestars’ third weekly Small Business Reopen Report, Florida is outperforming other states in terms of speed of economic recovery, and states that re-open later or more cautiously like California are lagging behind the national average. What’s more, consumers are looking for an outdoor escape as local bike shops see a business boom amid the pandemic.

Small Business Sales in the Midwest & Northeast Were Hit Hardest this Weekend
Memorial Day spending at small businesses varied widely by region but residents in the South demonstrated they are ready to get out and spend again, whereas the Midwest and Northeast saw some of the worst consumer spending compared to last year. 

In the South: 

• Mississippi’s sales were down just 7% compared to last year
• South Carolina and Tennessee were down 10% 
• Louisiana down 11%
• Alabama down 13%
• Florida down 26% 

In the Northeast: 

• Maine’s small business sales were down 75% compared to last year
• New Jersey and Massachusetts were down 66%
• New York down 65%
• Pennsylvania down 64%  
• Maryland down 61% 
• Connecticut down 50%

In the Midwest: 

• Michigan’s sales were down 78%
• Illinois down 64% 
• Minnesota down 36%

Holiday Weekend a Boon for Bike Shops and Barbecuing, But Less so for Restaurants   
Despite sales being down 30% nationwide compared to Memorial Day weekend last year, consumers in the states that could venture out did so with new hobbies and interests in mind. 

This weekend, Fivestars recorded consumers flocking towards at-home experiences like baking or barbecuing, and outdoor adventures that allow for social distancing like biking. 

Most notably: 

• Bikes shop sales surged nationwide, up 78% compared to last year 
• Grocery stores nationwide are down only 5% compared to last year, with some states seeing major increases year over year like California at +29% and Texas at +15% 
• Home goods and decor stores saw a boost in sales and are down just 28% compared to last year  
• Restaurants continue to take a hit and are down 54% compared to last year  
• Nail and hair salons were the lowest-performing vertical and nationwide were down 65% compared to last year

States That Reopened Early Are Continuing to See a Faster Recovery Rate 
Florida, which reopened earlier than other states to allow for retail shopping and haircuts, is nearly two-thirds of the way to recovery compared to this time last year. Despite sales being down 26% from Memorial Day weekend last year, the state of Florida saw a 14% increase in sales since last week and is out-performing the national average. 

What’s more, Georgia and Texas, which were both earlier than other states to reopen, are continuing to see a steady week over week sales increase of 12%, but are still down 44% and 41% respectively compared to Memorial Day weekend last year. Taking a more conservative approach to reopening, California saw a 10% increase in sales from last week, and is still down 55% compared to Memorial Day weekend last year.  

“This weekend was a pivotal moment for our economy,” says Victor Ho, Founder & CEO of Fivestars. “As local governments lift more restrictions, it’s clear that consumers are eager to venture outdoors and spend locally again. It’s going to be a long journey, but supporting local businesses is a fight worth fighting for.” 

This is the third weekly Small Business Reopen Report from Fivestars. Last week’s report analyzed small business spending at physical stores in California, Texas, Georgia, Arizona and Florida, and found that states that have newly reopened such as Arizona and Florida, are seeing an increase in sales, while others like California fall behind. Overall, last week’s study found that the U.S. was at a near 50% recovery rate and this week the nation has reached 55%.  

To learn more about Fivestars, visit fivestars.com. 

About the Study
Fivestars analyzed millions of data points from its platform from May 18-24, 2020 compared to May 11-17, 2020, and from Memorial Day weekend 2020 compared to Memorial Day weekend 2019, representing customer traffic and sales at over 14,000 merchants nationwide. The weekly report, titled “Small Business Reopen Report,” reveals a number of insights into the economic impact of reopening small businesses. 

About Fivestars
Fivestars is one of America’s largest local commerce platforms. Founded in 2010 by former McKinsey analysts Victor Ho and Matt Doka, the company’s mission is to help local businesses turn every transaction into a relationship. The company offers a robust payment and customer loyalty platform, enabling local businesses to increase customer retention, driving sales. For more information visit: www.fivestars.com.
 

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