Fiserv’s Small Business Index Improves in July But Restaurants Lag

Major payments providers have focused in recent years on signing and providing devices and services for restaurants, but that big bet may be taking at least a temporary beating, according to the latest Small Business Index from the big processor Fiserv Inc.

The overall index, which is derived from Milwaukee-based Fiserv’s own processing data, notched what the company calls a ”modest improvement” last month to 141, with small-business sales up 3.5% year-over-year. Retail spending staged a “decisive bounce-back” compared to June, a Fiserv analyst says in a release announcing the July data. Fiserv officials weren’t immediately available for comment.

Eating places, however, lagged, with the “food services and drinking places” category indexing at 123, down fully four points from June. Despite a 0.7% rise in foot traffic compared to July last year, restaurant sales dipped 1.6% year-over-year. July represented a second straight month of “declining” sales and foot traffic, the Fiserv report says.

The weakness in restaurants came as the index as a whole rose on a 3.3% rise in transactions year-over-year, according to the July report. Compared to June, sales at small businesses rose 1.3% even though transactions slipped 0.7%. “Consumer spending patterns continue to shift, most notably with retail spending experiencing a decisive bounce back compared to June,” said Fiserv’s chief data officer, Prasanna Dhore, in a statement. “Specialty trade and professional services also performed very well due to seasonal demand and stabilizing inflation rates.”

Restaurants have emerged in recent years as a target market for a wide array of processors, technology vendors, and other providers of payments services. That has led to significant outlays by processors seeking to acquire heft in the dining market. In one of the most significant recent moves, Shift4 Paynents Inc. in June closed on its $250-million acquisition of Revel Systems, a 14-year-old payments-technology provider to more than 18,000 dining locations.

Fiserv introduced its Small Business Index in January and has released a report each month since. It said at the time it expected at some point to make a breakout by payment method a part of its report.