Redirecting 10% of spending from big to small retailers could add $11B to small business economy

Wellington— 24 November, 2025 —Xero, the global small business platform, has found shifting just 10% of spending from big to small businesses could mean $11 billion more in the hands of small businesses.

Xero economists have analysed 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 a significant impact on the small business economy, especially in key spending periods like Black Friday and Christmas.

“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 September 2025.

Despite the most recent 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: Opportunities and challenges for small retailers

Black Friday, which typically drives a significant increase in sales activity, can pose both opportunities and challenges for retailers.

“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 capitalise on Black Friday and the holiday season while staying true to their values,” said Snelling.

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.

“We hear time and again that local operators excel in their service and those personalised 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,” said Young.

Snelling adds that there are a range of digital tools available to help small businesses make informed decisions about when, how and what they might discount for Black Friday and the holiday season. 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.

Xero is also sharing tips for small business retailers to help them prepare for the holiday season:

• Dive into last year's sales data. Use visualisations to understand where you actually made money, to help purposefully prepare for this year.

• Check your margins before you slash your prices. Dashboards give you a quick, clear view of your profitability, helping you to understand how discounting impacts your bottom line.

• Need a last-minute stock up? See how it will impact your cash flow. Use cash flow manager to forecast the impact of a big purchase on your business's finances to help you know how far you can splurge this Black Friday without running out of cash when you need it most.

Young appears with Snelling in a special retail-focused episode on Xero’s Open for Small Business podcast, published today: https://youtu.be/Zule8RtEx5k.

ENDS

Media Contact

Xero Aotearoa New Zealand | Kristen Barrett | +64 22 064 2924 | Kristen.Barrett@xero.com

About Xero

Xero is a global small business platform that helps customers supercharge their business by bringing together the most important small business tools, including accounting, payroll and payments — on one platform. Xero’s powerful platform helps customers automate routine tasks, get timely insights, and connects them with their data, their apps, and their accountant or bookkeeper so they can focus on what really matters. Trusted by millions of small businesses and accountants and bookkeepers globally, Xero makes life better for people in small business, their advisors, and communities around the world. For further information, please visit xero.com.