The businesses that line the main streets and side streets of our local communities are growing faster than the U.S. GDP – 3.1 percent versus 2.7, according to the latest Store Front Business Index. The 3.4 million businesses we call “Store Fronts” are seeing growth across all segments, but Professional Services in particular across Mountain States and the Southwest. We’ve been tracking these businesses state by state during primary season, and in anticipation of Super Tuesday, we visited 15 Store Fronts in Richmond, Virginia. What we found is very much a changing store front scene.
With the 2016 presidential race in full swing, many important economic issues are being discussed. One of the most significant: the health and importance of small businesses, and in particular, the “mom and pop” shops that line the main streets and side streets of our local communities. These businesses – we call them Store Fronts — represent 3.8 million businesses, accounting for nearly 37 percent of all SMBs. According to data from the latest Store Front Business IndexTM (SFBI), a collaboration between CAN Capital and PYMNTS.com, these small businesses are growing faster than the U.S. GDP.
The Store Front Business IndexTM tracks and profiles the vitality of these businesses in the U.S. This quarter’s edition shows what happened, through the end of 2015, to the businesses that keep our local communities thriving and surviving. The Index measures three criteria that we believe exemplify health: growth in new establishments, wages and employment. The study evaluates the merchants and service providers that are most typically found in urban and suburban areas: eating establishments, professional and personal services, construction, remodeling and repair services, fitness, and a wide variety of retailers. The typical store front employs a little more than 9 people per location.
The SFBI stood at 112.9 points in Q2 2015, compared with 109.5 points in Q2 2014. This represents growth of 3.1% in real terms between Q2 2014 and Q2 2015. Based on compounded annual growth rates, that growth outpaced real GDP growth of 2.7% — a significant difference of 40 basis points.
Other highlights of the study include:
And since the health of these businesses has such an impact on the health of our nation, we decided to take their temperature, state by state, as primary season unfolds. We’ve talked to more than 100 Store Front businesses in New Hampshire and South Carolina, and conversations are underway with those in Super Tuesday states. We asked them what they’d like to see our next president focus on – and gauged how each state did in comparison with their peers across their region and the country. What we saw and heard might surprise you.
About the Index
The CAN Capital Store Front Business Index™, powered by PYMNTS.com, provides a quarterly metric to measure the health of a subset of small businesses in the United States, with a specific emphasis on “store fronts” or those businesses that line the main streets and side streets of our local communities. To help create the Index, PYMNTS devised the methodology, model and the analytics behind the Index, while CAN Capital provided insights from their more than 17 years of experience with these types of businesses.