Square recently published its 2026 Local Economy Report, a first-of-its-kind analysis revealing how "regulars" and the neighborhood networks they create are the backbone of thriving local economies. The report reveals that regular customers drive 6x more revenue for local businesses, and unpacks the patterns and trends in their spending. This includes regulars making predictable purchases, tipping more generously, and prioritizing in-person experiences, which ultimately creates the steady demand businesses rely on during periods of economic uncertainty.

The report also shows how business success is no longer measured solely within a business's own four walls, but also by connections to regular customers and neighboring businesses. Square found that 32% of regular customers are shared by businesses in the same ZIP code, and each network connection between businesses can generate thousands in additional annual revenue.

The Neighborhood Network Effect: How Shared Regulars Power Local Economies

Square's analysis of millions of anonymized transactions reveals that local businesses are interconnected through shared regular customers, who create neighborhood networks where one business's success supports the next. The report reveals that:

• 32%  of regular customers are shared between businesses in the same ZIP code, keeping dollars circulating locally

• Each network connection is correlated with notable revenue growth: In Los Angeles, businesses earn an average of $2,201  more in annual revenue per connection, with similar lifts in Chicago ($1,100), New York ($1,500), and San Francisco ($2,025)

• In San Francisco, 67% of sellers are connected to other nearby businesses through shared regulars

• Coffee  shops and   casual  dining establishments  serve  as the most common neighborhood connectors,  acting as everyday hubs that funnel customers to retail, beauty, and service businesses

• Looking at Cash App consumer data, up to 60 cents of every dollar spent at local businesses stays circulating within the neighborhood

"Neighborhoods aren't just a collection of individual businesses; they're interconnected networks where success is shared," said Nick Molnar, Global Head of Sales & Marketing at Block. "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 neighborhood connections. Because when local businesses win together, entire communities thrive."

The 6x Effect: Why Regulars Are the Lifeblood of Local Business

At the center of neighborhood resilience is the "regular," a customer who visits a business at least four times per year. Square data shows these loyal customers are dramatically more valuable:

• Regular customers generate 6X more annual revenue than one-time visitors nationally - in Atlanta, this rises to 7X

• Regulars tip 11% higher on average compared to transient customers

• Regular customer revenue grew 7.67% in 2025, outpacing overall revenue growth (6.97%), even as transient revenue declined

• Product consistency drives loyalty: 78% of regulars at beauty businesses buy the same products each time; 59% of food & beverage regulars make the same order

• 90% of businesses using marketing tools successfully maintained regular customers in 2025, compared to only 38% of those that didn't

"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 Christine Kahm, Head of Customer Strategy at Block. "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 neighborhood 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  neighborhood network."

Consumers Are Staying Loyal Despite Economic Pressure

Loyalty from regulars has proven especially durable over time. Revenue from regular customers peaked during the height of the pandemic and has continued to grow since, underscoring loyalty's role as the most reliable hedge against volatility.

In 2026, despite rising costs and economic uncertainty, consumer commitment to local commerce remains strong:

• 75% of consumers plan to spend at least as much, if not more, at local businesses over the next 12 months

• 55% shop or dine at local businesses in their ZIP code at least weekly

• 32% often or always visit multiple local businesses in a single outing, reinforcing the neighborhood network effect

• 72% of consumers will tolerate price increases if paired with added value, such as better products or exclusive offers

However, spending priorities are shifting. When forced to cut back, consumers say they are most likely to reduce spending at bars, breweries (27%), and full-service restaurants (27%), while retail remains the most stable category with 78% of consumers maintaining or increasing spending.

Looking Ahead: The Path Forward for Local Businesses

The path forward for local businesses is clear: consumers will continue to shop locally, but with intention. As the multi-stop habit continues to define how people shop and dine, the businesses that invest in loyalty, convenience, and community will turn economic pressure into neighborhood growth.

Intention is not only a consumer trend, but also a strategic seller tactic. The businesses that lead in 2026 are those actively building neighborhood networks by deepening relationships with regulars, collaborating with nearby sellers, and creating shared experiences that turn occasional visitors into repeat customers across the block. By strengthening these connections, sellers expand their base of regulars and unlock the measurable revenue growth that comes from loyalty.

"Sellers need to know that the neighborhood is their competitive advantage," continued Molnar. "The businesses that will define the next era of local commerce aren't just focused on their own four walls. They're tapped into the rhythms of their community, deeply connected to their regulars, and showing up how it matters most: with ease, convenience, and in-person expertise."