New Capital One Study Finds Consumer Spending at Downtown Richmond Small Businesses Has Grown Nearly 50% Since 2019

Gap in spend growth rate between small business and non-small business has shrunk

A new study conducted by the Capital One Insights Center with assistance from Mastercard has unveiled insights into the growth and development of small businesses in Richmond, Virginia.

The study examined the small business ecosystem in Richmond using a measure of consumer spending based on anonymized and aggregated Mastercard transaction data, tracking growth and spending trends at small businesses from 2019 to 2023. It found that small businesses have recovered strongly since a 20% Mastercard consumer spend volume dip in 2020, nearly closing the gap with non-small businesses over the following three years. The study also found notable growth in the Manchester District, where the number of small businesses grew by 41% from 2019 to 2022, and Downtown, where customer spending increased by almost 50% over that same period.

With goals of identifying drivers of small business growth and analyzing the impact of redevelopment and investment, the study also examined the city’s entrepreneurial ecosystem and highlighted how local organizations in Richmond have driven resources to minority-owned businesses through outreach, relationship-building, and the city’s Office of Minority Business Development.

“This research continues to underscore the beneficial impacts of carefully considered, location-specific and ecosystem building strategies in creating an environment that promotes flourishing small businesses,” said Shena Ashley, President of the Capital One Insights Center.

The Richmond 300 plan has designated several areas within Richmond as "priority growth nodes," including the Manchester and Downtown neighborhoods, which have since witnessed substantial growth in small business activity and revenue.

The study found that the difference between small business and non-small business spend growth in Richmond overall has shrunk from over 120% in 2020 to just over 30% in July 2023, driven by a 75% increase in spending at small businesses relative to 2019. It also showed that consumer spending increased significantly in the Manchester and Downtown districts, in particular. In Manchester, which includes neighborhoods that are historically Black and Hispanic and have higher rates of low-income community members, consumer spending at small businesses jumped to 53% higher in 2021 and 44% higher in 2022, compared to 2019 levels. Downtown, an area where many other cities have struggled to bring back businesses and employees, also experienced significant growth, with a 24% increase in small business openings in 2022 compared to 2019.

“The last several years have seen record numbers of new small businesses, which can bring more opportunity for commerce and growth in U.S. communities,” said Ginger Siegel, North America Small Business Lead for Mastercard. “Using real-world insights to tailor and deliver support to small businesses can help unlock their potential and enable them as engines of economic vibrancy in our neighborhoods.”

Visit the Insights Center website for additional research on small business.

About the Capital One Insights Center

The Center combines Capital One research and partnerships to produce insights that advance Capital One’s Impact Initiative. As a platform for data and dialogue, the Center strives to help changemakers create an inclusive society, build thriving communities, and develop financial tools that enrich lives. The Center draws on Capital One’s deep market expertise and legacy of revolutionizing the credit system through the application of data, information, and technology. Learn more about the Insights Center here.

About Mastercard (NYSE: MA)

Mastercard is a global technology company in the payments industry. Our mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential. With connections across more than 210 countries and territories, we are building a sustainable world that unlocks priceless possibilities for all.

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