If Australians redirected around 10% of overall household spending from big businesses to small businesses, it could potentially mean $76 billion more in the hands of small retailers according to the latest analysis by small business platform Xero. This new figure highlights the seemingly immense power of consumer spending in the lead up to Christmas.
Xero economists calculated this figure by “analyzing ABS 2024 total household consumption data.”
Excluding spending unlikely to be with small businesses, such as utilities, and some transport and communication, “$758 billion in potential household spending remains.”
Redirecting just 10% of this could leave small businesses “$76 billion better off.”
Angad Soin, Managing Director AU/NZ and Global Chief Strategy Officer at Xero said:
“The data tells a powerful story: a simple ten percent shift in spending unlocks a massive $76 billion for the small business economy. While major retailers have the war chest to sustain marathon sales campaigns from Black Friday to Christmas, small businesses have to be more disciplined. This holiday season, where you spend matters more than how much you spend.”
As noted in the update:
“We’re calling on conscious consumers to consider where they can make spending swaps from big businesses to small this holiday season. We recognize that everyone has personal circumstances and household budgets to consider, but shopping small doesn’t always have to cost more. It’s about remembering that every purchase from a small business isn’t just a transaction; it’s an investment in local families, jobs, and communities.”
The call to action follows a turbulent period for Australian small businesses, with Xero Small Business Insights (XSBI) data showing “sales growth slowed earlier in the year.”
But the data from the Sept quarter ’25 offered a welcome sign of recovery, with sales growing “by 5.5% year-on-year (y/y) – the strongest quarterly result in two years.”
Despite the rebound, this uplift is yet to be “fully reflected in hiring confidence.”
Jobs growth slowed slightly “to +2.7% y/y in the September quarter, demonstrating that small business owners remain cautious about taking on new staff.”
Council of Small Business Organizations Australia (COSBOA) Chair Matthew Addison said:
“While we’re cautiously optimistic about the health of our small business sector, we must acknowledge that it’s a challenging time – particularly for small retailers competing for their share of pre-Christmas sales. Like Xero, COSBOA is calling on Australians to shop small this holiday season. Knowing that $76 billion could potentially be redirected towards small businesses shows the collective power of our conscious consumerism. The choices we make at the checkout – especially over the coming weeks – can give our nation’s entrepreneurs the confidence to keep investing and creating jobs in 2026. This is meaningful stuff.”
In a survey of 500 Australian small business decision-makers, Xero found that just “over one in four (41%) go on sale somewhat often throughout the year, while 15% go on sale very often.”
The top reasons for doing so include to “reach new customers (57%), and to boost sales and increase cash flow (55%).”
Beyond promotions, small businesses noted that the most effective ways to attract and retain customers year-round “are social media engagement (47%), and providing personalized offers or experiences (34%). “
