Canada’s small business sales continue to fall, according to new quarterly data from Xero
The latest Xero Small Business Insights report highlights consumers remain reluctant to spend
Toronto — 31 October 2024 —Xero, the global small business platform, released its latest quarterly Xero Small Business Insights (XSBI) report for Canada, featuring data from April to June 2024. Canada’s weak small business sales performance continued in the three months to June. The data in the previous quarter’s XSBI report, paired with the Bank of Canada’s (BoC’s) first interest rate cut in June, suggested there may be some improvement in sales on the horizon. On a more positive note, late payment times reduced in the three months to June, with small businesses being paid 6.3 days late on average, compared to 7.6 days late in the previous quarter.
Lack of sales remained a core challenge facing Canada’s small businesses in the June quarter. Over the course of the 15 months to June 2024, sales dropped in 13 out of the 15 months and in the three months to June, sales fell an average of 3.7% y/y. Sales volumes, which tracks how many goods and services are being sold, excluding the effect of price changes, also declined. From April to June, small business sales volume fell by 6.5% y/y on average, following a 7.1% y/y decline in the previous quarter.
“The latest XSBI findings highlight that Canada’s small business economy is still dealing with tough trading conditions, despite the Bank of Canada's rate cut,” said Ben Richmond, Managing Director, North America at Xero. “Consumers continue to be reluctant to spend which flows through to the bottom line of small businesses. It’s a crucial time for business owners to extend their brand loyalty efforts, in the form of bonus rewards programs, being lenient on return policies, and offering exceptional customer service, to ensure they are well placed when consumers increase their spending again.”
The report’s regional data, which covers British Columbia, Alberta and Ontario, showed that the provinces collectively experienced negative sales growth, however some fared better than others across XSBI’s payment times metrics:
- British Columbia: Payments were made the quickest in the westernmost province in the April quarter, sitting at 26.6 days on average
- Alberta: Sales fell by 0.9% y/y, which was the best result in the region since the three months to March 2023
- Ontario: Payment times improved by 1.4 days on average, with the average payment time for the three months to June sitting at 28.6 days
“While the June quarter’s sales data was not what we had hoped for, it serves as a reminder that small businesses likely have to wait a little longer until they see tangible benefits resulting from the Bank of Canada’s recent interest rate cuts,” said Louise Southall, Economist at Xero. “Supporting local vendors in the upcoming holiday season is a small, accessible way for anyone to contribute to Canada’s economic recovery.”
To access the latest data, visit xero.com/xerosbi.
ENDS
MediaContact
Xero | Rola Tfaili | rola.tfaili@xero.com
About Xero
Xero is a global small business platform with 4.2 million subscribers. Xero’s smart tools help small businesses and their advisors to manage core accounting functions like tax and bank reconciliation, and complete other important small business tasks like payroll and payments. Xero’s extensive ecosystem of connected apps and connections to banks and other financial institutions provide a range of solutions from within Xero’s open platform to help small businesses run their business and manage their finances more efficiently.
About Xero Small Business Insights
The aim of Xero Small Business Insights is to create insights to help inform decision makers in support of the small business economy as a whole. The principal source of small business insights in this report is customer data from Xero - a small business platform that supports online accounting and a range of other applications. Xero is a responsible custodian of our customers' sensitive data and does not release any data that could identify individual businesses. The data used is aggregated and anonymized to ensure the privacy of Xero subscribers, and their counterparts.
As part of the program, we publish regular blogs and research notes and deep-dive special reports on specific small business topics. These can all be found at xero.com/xerosbi.
Full details of the methodology can be found here.
Related media and inquiries
For all media inquiries, please contact the Xero media team.
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