Square report says regulars drive local business revenue

Square has published its 2026 Local Economy Report, which found that regular customers generate six times more annual revenue than one-time visitors.

Based on millions of anonymised transactions across Square's network and a US consumer survey, the report examines how repeat customers connect businesses within the same neighbourhood.

Shared customers

One of the central findings is that 32% of regular customers are shared between businesses in the same ZIP code. Those overlaps help keep spending circulating locally and create what Square describes as a neighbourhood network effect.

Each connection between businesses through shared regulars was linked to higher annual revenue. In Los Angeles, that correlation averaged USD $2,201 a year per connection, compared with USD $1,100 in Chicago, USD $1,500 in New York and USD $2,025 in San Francisco.

San Francisco showed one of the densest local links in the analysis, with 67% of sellers connected to other nearby businesses through shared regulars. Coffee shops and casual dining venues were the most common connectors, often acting as hubs linking customers with nearby retail, beauty and service businesses.

Separate Cash App consumer data cited in the report suggests up to 60 cents of every dollar spent at local businesses remains within the neighbourhood. That supports Square's broader argument that businesses do not operate in isolation when they build repeat trade.

"Neighbourhoods aren't just a collection of individual businesses; they're interconnected networks where success is shared," said Nick Molnar, Global Head of Sales & Marketing, Block.

He added, "When a coffee shop thrives, the salon next door benefits. When regulars support one business, they're often supporting five others in the same ZIP code. The future of commerce is local, and Square helps sellers understand and activate these neighbourhood connections. Because when local businesses win together, entire communities thrive."

Regular spending

Square defines a regular customer as someone who visits a business at least four times a year. By that measure, repeat buyers are significantly more valuable than transient customers across several indicators.

According to the data, regulars tip 11% more on average than transient customers. Revenue from regulars also grew 7.67% in 2025, ahead of overall revenue growth of 6.97%, while transient revenue fell.

The report also points to consistent buying habits among repeat customers. In beauty, 78% of regulars buy the same products each time, while 59% of food and beverage regulars place the same order.

Square also linked customer retention to the use of its marketing products, finding that 90% of businesses using marketing tools maintained regular customers in 2025, compared with 38% of those that did not.

Christine Kahm, Head of Customer Strategy, Block, said the data showed these relationships had measurable commercial effects.

"At Square, our research has long shown that local economies thrive on relationships - between customers and sellers, sellers and their staff, and even between neighboring businesses themselves," said Kahm.

She added: "And now, with this data analysis, we're further reinforcing that these connections aren't just feel-good stories; they're measurable drivers of revenue and resilience. Our unique vantage point across millions of transactions reveals the true anatomy of a neighbourhood network: businesses that share regular customers earn thousands more in annual revenue. It's these relationships - built on consistency, loyalty, and community - that underpin and power a thriving neighbourhood network."

Consumer behaviour

The study also suggests local spending remains resilient despite pressure on household budgets. Square's consumer survey found that 75% of respondents plan to spend at least as much, if not more, at local businesses over the next 12 months.

More than half, or 55%, said they shop or dine at local businesses in their ZIP code at least weekly. Another 32% said they often or always visit multiple local businesses during a single outing, a pattern Square links to the local network effect.

There were signs, however, of changing priorities. When forced to cut spending, 27% of consumers said bars and breweries would be among the first categories reduced, while the same share said they would cut back on full-service restaurants.

Retail appeared more resilient in the survey, with 78% saying they would maintain or increase spending in that category. The findings suggest consumers still favour local businesses but are becoming more selective about where they spend.

Square found that 72% of consumers would accept price increases if they were matched by added value, such as better products or exclusive offers. That points to more deliberate spending rather than a broad retreat from local commerce.

The report draws on transaction-level data from 2019 to 2025. For its network analysis, Square mapped connections between sellers that shared at least one regular buyer, then examined city-level groupings to identify the largest clusters of linked businesses.

The consumer research surveyed 994 people across the United States. Overall, the findings place repeat trade and local customer overlap at the centre of how many small businesses keep revenue steady as economic conditions remain uncertain.

"Sellers need to know that the neighbourhood is their competitive advantage," Molnar said.