It’s a good time to be a business owner on Main Street USA.
The latest Store Front Business Index™, a PYMNTS and CAN Capital collaboration, reveals that while the past 12 months have been a raucous time for the stock market, it’s been a profitable time for many store front businesses. According to the Index, the space has seen substantial growth during that period, rising 3.1 percent since Q1 2015.
That growth has outpaced some pretty impressive barometers, including the GDP. While the GDP saw real growth rates of exactly 2 percent, the Store Front Index™ grew at a rate of 3.5 percent between Q3 2014 and Q3 2015.
What’s more, the research predicts that the store front business space will continue to increase at a real growth rate of 3.1 percent, reaching 115.3 points by Q1 2016, while the real growth of the GDP is expected to slow to 1.4 percent during the same period.
Other key takeaways from the Store Front Index™ for Q2 2016 include:
- Professional Services, Building Contracts and Home Remodelers and Fitness companies are the fastest growing industries in this quarter’s Index, growing at a rate of 5 percent, 4.4 percent and 4.3 percent, respectively. The most growth occurred in the Southwest, Mountain and South regions, each of which has seen growth of at least 4 percent over the most recent four-quarter period.
- This growth is projected to increase by 5.2 percent for Q1 2016.
- According to analysis in the Index, population growth is positively related to economic development due to an increased ability to produce and consume goods.
The PYMNTS and CAN Capital Store Front Index™ provides a quarter-by-quarter indexing of the health of a subset of small businesses in the United States. Specifically, the Index emphasizes on “store fronts” or the businesses that line the main and side streets of our local communities.
To compile the Index, we used data from the Quarterly Census of Employment and Wages provided by the U.S. Bureau of Labor Statistics. All told, more than 10 million data records covering the number of establishments, employees and total wages are used to developed the Index. The Index is calculated as a weighted average of the three factors: the number of establishments; the number of employees; and the total wages paid for select industries.
A Florida restaurant adapts and thrives
To reflect the current state of Main Street USA, in the Q2 Index, PYMNTS caught up with Heather and Michael Barnes, a couple who moved to Key West, Florida, 16 years ago and bought Mangia Mangia, a restaurant ingrained in the tightly-knit community. But, despite rave reviews, the Barneses have had their share of struggles over the years, including when hotels critical to their swell of diners in the busy season were closed for rebuilding in 2013.
That hotels are now reopened and business at Mangia Mangia has again picked up, thanks in part to a loan that helped them ride out leaner times and then another that has allowed them to expand.
Here’s a sneak peek:
The two-year hotel rebuilding project took out almost 500 rooms from the four-by-two-mile-wide island, which meant that many tourists couldn’t stay in Key West during that time.
“For a restaurant that opened for dinner at 5:30 in the evening in a tourist destination, the lack of hotel guests meant fewer people eating at the restaurant,” Mr. Barnes said.
It was during that time that the couple decided to shop for loans to help them offset the lost income and stay afloat. After months of shopping, the couple decided on a $20,000 loan from CAN Capital, which they said helped the restaurant through the tough times and ultimately enabled them to expand.
With the hotels now back on the boulevard, business is bustling again.
“We have had one of the best seasons since we’ve been here for the last 10 years and it’s really been awesome,” Mrs. Barnes said. “Now I feel secure in moving forward and expanding our business to serve lunch and breakfast, and opening the wood fire oven.”
To download the 2016 Q2 PYMNTS.com Store Front Index™, powered by CAN Capital, click the button below.
About the Index
Store Front businesses are the heartbeat of the local economy – the shops that line the main streets and side streets of the local community. It’s the convenience store, dry cleaner, fitness center, hardware store, home remodeler, coffee shop, local restaurant and watering hole, the hair salon. The PYMNTS Store Front Business IndexTM has assembled data on each and every one of these businesses across the U.S. and measures their vitality every single quarter. Think of it as your window into the health of this vital sector every 90 days.