While Donald Trump’s victory may have propelled the Dow Jones to an all-time high, it had little effect on the state of Main Street.
The latest PYMNTS Store Front Business Index™ reveals that, while store front businesses showed growth in Q3 2016, that growth dipped slightly in comparison to Q2 2016.
According to the index, Main Street merchants scored 1.7 percent growth in Q3 2016, a dip from the 1.9 percent noted in Q2 2016. So, is Main Street sounding the alarm? Not really. Even though there was a slight decrease in index score, it still marked an overall increase from where the GDP was a year ago.
All told, the new Store Front Business Index™ Score for Q3 2016 was 115.9 points.
Other key takeaways from the index for Q4 2016 include:
- Building contractors/service and repair, fitness and professional services companies showed the fastest growth in this quarter’s index, with growth rates of 5.1 percent, 4.6 percent and 3.9 percent, respectively.
- Main Street USA boasted a 1.7 percent growth in Q3 2016.
- Mountain and Southern states continued to score high in terms of employment and wages. The two regions grew by 3.7 percent in Q3 2016.
The PYMNTS Store Front Business Index™ provides a quarter-by-quarter indexing of the health of a subset of small businesses in the United States. Specifically, the index focuses on “store fronts,” or the shops 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 three factors: number of locations, number of employees and total wages paid for select industries.
The index also includes a conversation with Vince Petryk, founder of J.P. Licks Ice Cream, who shared his Main Street success mantra that has helped him compete with deep-pocketed national chains. Petryk founded his chain of ice cream stores in Jamaica Plain, a Boston neighborhood, in 1981. Since then, the business has expanded to over a dozen locations around the greater Boston area.
The story of smaller businesses being pushed out by larger, national chains is nothing new, but Petryk expects no sympathy as a small business owner trying to make ends meet.
“I really am a Darwinian when it comes down to the strongest should survive,” he said.
To stay competitive on the Main Street for over 35 years, Petryk has always made sourcing fresh ingredients his priority. “For me, quality is really at the bottom line, and I temper it as long as it’s within an acceptable range,” he said.
And his business has steered clear from relying on highfalutin marketing to distinguish itself from competitors swearing by the current fads.
Petryk has often looked upon expansion as a way to keep himself excited and his business energized.
“A lot of small business owners with one store aren’t happy,” he said. “They’re not making any more money from year to year. For some reason they don’t expand — they don’t want to or they can’t.”
“When I started getting those feelings, I did another store,” he said. “And it was like, ‘Yay, fun!’ I get to design a store, and I get to make a little more money if everything goes well.”
And while store expansion may be the cure to a stagnating business, the struggle of selling a seasonal product doesn’t go away.
“We do our best without selling our souls,” said Petryk, who has resorted to selling coffee and bakery products to make ends meet when the weather is cold.
To download the 2016 Q4 PYMNTS Store Front Business Index™, click the button below
About The Index
The Store Front Business Index™ (SFBI) provides a quarterly metric measuring the health of typical small businesses that populate Main Street, USA. Measurements are in real terms and are based on the growth in new establishments, real wages and employment.
Main Street small businesses are identified by the North American Industry Classification System codes that relate to businesses that are typically small businesses found on Main Streets in both urban and suburban areas. This includes eating establishments, professional and personal services, construction, remodeling and repair services, fitness clubs and a wide variety of retailers.