Aussie small businesses turning to credit to compete in Black Friday sales

Melbourne, Australia — 6 November 2026 — Australian shoppers can expect more Black Friday deals this year. New research from Xero, the global small business platform, reveals more than half (53%) of Australian small businesses will definitely take part in the Black Friday and Cyber Monday sales, up from 43% in 2025. But for many, keeping up is coming at a cost.

The research found more than half (55%) of businesses who have taken part before relied on credit or deferred payments to fund extra stock and staff. Seven in 10 feel pressure to compete with big businesses during Black Friday, and 54% say the sales period makes a material difference to whether they hit their annual profit target.

Black Friday on credit?

The research reveals the financial lengths some small businesses are going to in order to participate in the sales. Among those who took part last time:

• 29% used a business credit card to fund additional stock or staff
• 25% used supplier payment terms or buy now, pay later arrangements
• 22% relied on an overdraft or business loan
• 12% delayed paying other bills or suppliers

“Black Friday can be a real opportunity for Australian small businesses to bring in new customers and give their cash flow a boost heading into the end of the year. But it’s also a big investment, and many are taking on extra stock, staff and even debt before they know whether the sales will come. With the Reserve Bank lifting the cash rate again this week, the cost of that borrowing continues to rise just as small businesses head into their busiest trading weeks,” said Charlie Sheppeard, Executive General Manager of Strategy and Operations ANZ, Xero.

Not everyone is cashing in

More than half (54%) of past participants said their results were better than expected, and two-thirds (67%) hit the sales they needed to make discounts worthwhile. Of those who took part last year, 81% will definitely take part again, and only 2% have ruled it out.

But nearly one in four (23%) saw their profit margins shrink, and almost a third (31%) either fell short of the sales they needed or hadn’t set a sales target in the first place. Micro businesses saw the lowest performance: fewer than half (43%) of those with two to 10 staff hit the sales they needed, compared with three quarters (75%) of businesses with 11 to 20 staff.

Among businesses that have never taken part and are sitting it out or undecided this year, 28% don’t have the stock to support it, 27% can’t afford to discount and one in five (20%) see it as a big business event.

Confidence is high, but planning isn’t always keeping pace

The average top discount planned is 34%, in line with the 35% offered last time, and over a third (35%) of those who have set a discount plan to offer more than 40%. When surveyed, more than a quarter (27%) were yet to decide.

Among businesses taking part or considering it, eight in 10 (81%) are confident they know the maximum discount they can offer while staying profitable. Across all businesses, however, less than a third (30%) use real-time profit or margin data to decide on discounts. Instead, 43% rely on experience and judgement, and almost a quarter (23%) use gut feel. Just 13% ask their accountant or bookkeeper.

The planning gap goes beyond Black Friday. Only one in five (21%) businesses have a documented sales plan for 2027 that they review regularly, while 22% plan month to month and one in 10 have no plan and don’t intend to make one.

“Businesses give themselves the best chance when they can see their numbers clearly and go in with a plan,” said Sheppeard. “That means knowing how much you can afford to discount, what you need to sell to make it worthwhile, and exactly when your costs will land. When you have real-time visibility of your cash flow, Black Friday becomes a calculated decision, rather than a leap of faith. Most small businesses already have an expert in their corner. An accountant or bookkeeper can help see the full picture before the sales starts.”

Getting ready for AI shoppers

Xero’s research also found Australian businesses expect AI to play a growing role in festive shopping. Nearly two in five (38%) predict AI shopping agents to boost their holiday sales, with 22% anticipating an increase of more than 10%.

Yet more than half (54%) haven’t taken any practical actions to make their business easier for AI shopping tools to find, and just 19% have added structured product information that AI can read.

“Whether shoppers are searching themselves or asking an AI assistant, small businesses need to be easy to find this festive season. And for shoppers, supporting small doesn't have to mean chasing the biggest discount. Small businesses offer things bigger players often can’t, like a personal touch connection to community, locally-made products and experiences,” said Sheppeard.

Small businesses can find practical tips on cash flow forecasting and planning for peak trading at xero.com.

ENDS

Media Contact

Xero Australia | Jess Brophy | +61 431 268 549 | jess.brophy@xero.com

About Xero

Xero is a global small business platform and a trusted financial operating system for the AI era. Xero’s purpose is to make life better for people in small business, their advisors, and communities around the world. By unifying core financial operations (including accounting, payroll and payments) underpinned by insights and a robust ecosystem into autonomous workflows, we empower 5 million small businesses and accountants and bookkeepers across 180+ countries to move from managing records to making informed decisions. For further information, please visit xero.com.

About the research

This year’s research was conducted by Insights Exchange via an online survey of 500 small business owners or senior decision-makers in businesses with up to 200 employees recruited via independent panels between 22 September - 5 October 2026. Participants worked in customer service, retail, hospitality, marketing, media and communications, sales, tourism or trades. Results are weighted by business size. Comparisons with 2025 use the 2025 Xero Black Friday survey, weighted to the same business size targets.