Local business GDP report: Hardest-hit industries saw spending drop by 50% in Q2

This week, the U.S. GDP report revealed a stunning figure. Q2 GDP shrunk by a record 33% as the coronavirus hammered the American economy. While GDP gives a window into a massive and complex economic landscape, it’s clear that small and local businesses have been hit especially hard.

“Local business GDP,” if such a figure existed, was almost certain to see an even larger drop than the GDP as a whole.

With Womply Email Marketing, you can turn customers into regulars and get more repeat business with targeted emails that send automatically when customers transact with you. Learn more when you sign up for Womply Free!

So we dove into our data to build our own “local business GDP” report to learn whether local businesses saw an even larger drop in Q2 spending than the broader American economy. To do so, we examined credit card transaction data from a sample of 330,000 small and local businesses from Q1 2019 through the end of Q2 2020.

Here’s what we found.

Q2 spending was down 21% vs Q1 at all local business industries, but 50% in industries hit hardest by the pandemic

Unlike GDP, local businesses expect to see slight increases and decreases from one quarter to the next. Seasonal trends bring heavy foot traffic in the spring and summer to get them through slower winter months, for example.

But what local businesses in our analysis experienced in the second quarter of 2020 was clearly a devastating drop during a typically busy time of year.

As you can see, all local and small businesses in our analysis experienced a 21% decrease in total consumer spending from Q1 2020 to Q2 2020. A stunning drop, no question. But when we isolated industries more likely to be negatively impacted by the pandemic, the figures get even grimmer.

Q2 2020 saw consumer spending fall by half at a combined view of the following industries: Restaurants, bars and lounges, health and beauty businesses, arts and entertainment businesses, parking businesses, sports and recreation places, and transportation businesses.

Here’s a look at how much spending dropped from Q1 to Q2 at each of the hardest hit local business industries in our analysis:

Spending at hardest hit industries was down 62% in Q2 2020 vs Q2 2019

Q2 is typically one of the, if not the single-biggest quarter of the year for many local businesses. Events like Spring Break, Mother’s Day and Father’s Day weekends, and the return of warm weather bring big days and boosted sales.

So comparing Q2 2020 to Q2 2019 reveals just how devastating the coronavirus pandemic has been to local businesses across the country.

The local business economy saw a 33% drop in spending between Q2 2019 and Q2 2020, but the most heavily hit industries saw spending plunge 62% from 2019 to 2020.

Here’s a look at how much spending fell at each individual industry from our combined view of those hit hardest by the pandemic:

View additional reports on the impact of COVID-19 on local businesses

The coronavirus pandemic has upended the lives of millions of Americans and devastated local businesses across the country. Check out some of our other detailed reports to see exactly how much local businesses have been impacted, and stay tuned for more updates and reports in the future.


What is the Employee Retention Credit and can I get it if I received PPP loans?

In this 7-minute read: What is the Employee Retention Credit? How much can an employer receive with the Employee Retention […]

Read More

The PPP is out of money (again): what can I do? 2021

In this 2-minute read: The SBA announced that the Paycheck Protection Program ran out of money for most borrowers on […]

Read More

9 ways to maximize PPP loan forgiveness (important 2021 tips)

In this 7-minute read: Ways to maximize and help you get your PPP loan forgiveness Over 10 million businesses, independent […]

Read More

Do PPP loans affect business taxes and deductions?

In this 6-minute read: Is the PPP loan taxable? What are the tax implications of a forgiven PPP loan? Will […]

Read More

Restaurant Revitalization Fund (RRF) basics, and can PPP borrowers apply?

In this 10-minute read: Restaurant Revitalization Fund (RRF) introduction Who is eligible for RRF grants? How and when to apply […]

Read More

PPP tips for auto services businesses, dealers, detailers (2021 rules)

In this 7-minute read: Can service providers in the auto-related industries get the PPP loan? 2021 PPP updates that increase […]

Read More

See why Womply is the #1 marketing and CRM solution used by 500,000+ businesses.

Please start typing, and then choose your business from the dropdown.

By submitting this form you agree to Womply’s Terms of Service and Privacy Policy.