Xero, the global small business platform, has found that shifting only 10% of spending from bigger to smaller businesses could potentially mean $11 billion more in the hands of small businesses. Xero economists have analyzed 2024 New Zealand household consumption data and “excluded spending unlikely to be with small businesses, like utilities, some transport and communications. An estimated $110 billion of household spending remains.” Moving just 10% of this potential spend would bring “$11 billion to small businesses.”
Bridget Snelling, Country Manager – Aotearoa New Zealand at Xero, says conscious consumers can have an impact on the small business economy, especially in key spending periods.
“November and December are the biggest months of the year for the retail industry. There is always a lot of noise coming from the big business retailers which can make the smaller retailers with their own unique offerings a lot harder to notice. We’re calling on all New Zealanders to consider local small businesses when they’re shopping over Black Friday and Christmas. Of course you need to consider your personal circumstances and household budgets, but even a small reallocation of purchases makes a big difference.”
It has been a challenging year for small businesses “in retail, with XSBI data showing negative retail sales results for four quarters from the March quarter 2024, before they picked up to a modest 2.9% year-on-year growth in the quarter ending in Sept 2025.”
Despite the rise in national sales, XSBI data for the September quarter showed negative “jobs growth at -1.2% y/y.”
Snelling says that while hiring confidence has “not yet returned, there is reason for cautious optimism for businesses looking toward the holiday season.”
The XSBI findings are consistent with Retail NZ’s Retail Radar report which highlights that although “two-thirds of retailers remain confident about the future, 62% did not meet their sales targets in the last six months.”
Black Friday, which typically drives a significant increase in revenue, can pose both “opportunities and challenges for retailers.”
Snelling continued:
“In a turbulent economy, to discount or not to discount is a tough decision. But regardless of where small businesses land, there are ways small businesses can capitalize on Black Friday and the holiday season while staying true to their values.”
Retail NZ’s Chief Executive Carolyn Young said some retailers are adapting by “streamlining operations and being selective with stock levels.”
“Retailers are walking a fine line between caution and creativity. While some are investing in fresh product lines and in-store experiences, many are holding off on hiring due to financial constraints. It’s a pragmatic response to a challenging environment and caution is needed, as well as a strong strategy for the entire holiday season.
Young also mentioned:
“We hear time and again that local operators excel in their service and those personalized touches that offer meaningful engagement to customers. The best local businesses form strong relationships and play a vital role in their communities. It’s important for retailers to remember that being competitive isn’t just about discounts.”
Snelling adds that there are a range of digital tools offered to help small businesses make better decisions regarding when, how and what they might discount for Black Friday and the festive season in general.
These include:
- Analytics, embedded in Xero, which helps support cash flow forecasting and data-driven decisions,
- Inventory management apps like Cin7, designed to enable retailers to measure, manage and make the most of a sales event.