Kiwi small business sales remain subdued in June quarter

Wellington— 31 July, 2025 — Xero, the global small business platform, today released its Xero Small Business Insights (XSBI) revealing weak New Zealand small business sales performance in the June quarter.

XSBI data shows consistent underperformance over the past 12 months, with Kiwi small business sales falling by 0.1% year-on-year (y/y) in the June quarter, following a modest 1.1% y/y rise in the March quarter and a 0.5% y/y decline in the December quarter.

These results are well behind the long-term national average of 6.3% y/y (Jan 2017 - Jun 2025). It’s also a step behind Australia’s 3.0% sales growth in the June quarter.

One of the few bright spots in the national data is a 4.4% y/y rise in sales in the month of June – the strongest monthly increase since April 2024.

Sales weakness was concentrated in the North Island, with Northland (-3.5% y/y), Wellington (-3.1% y/y), and Auckland (-1.3% y/y) all recording declines.

In contrast, South Island centers outperformed the national average, with Otago (+3.9% y/y) and Canterbury (+1.8% y/y) showing resilience.

Agriculture sector performs well over quarter

A closer look at the XSBI sales data shows the agricultural sector is charting its own course and bucking the national trend with sales growing 10.9% y/y in the June quarter.

This follows strong growth of 11.1% y/y in the March quarter and 14.9% y/y in the December quarter, reversing 18 months of tepid performance in the sector.

Industries more sensitive to discretionary spending and interest rates are facing tougher conditions. Construction sales fell 6.4% y/y in the June quarter, a decline that started in late 2023.

Bridget Snelling, Country Manager - Aotearoa New Zealand at Xero, said: “This is particularly concerning given construction’s multiplier effect across the economy, from retail to manufacturing.”

Retail sales in June 2025 were unchanged compared to the same month in 2024, following four consecutive quarters of year-on-year declines.

“While the pace of decline has eased in recent quarters, this moderation suggests only tentative signs of recovery,” says Snelling.

Meanwhile, hospitality sales fell by 2.1% year-on-year in the June quarter, marking the fifth straight quarter of contraction for the sector.

“These subdued sales figures highlight an ongoing challenge for Kiwi small businesses,” says Snelling.

“Despite consistent OCR cuts by the Reserve Bank since August 2024, we’re yet to see the expected boost to consumer and business activity. While there are some bright spots like agriculture, the overall picture remains muted,” says Snelling.

“Planning is particularly difficult right now, with global economic uncertainty adding to the pressure. In these conditions, it’s more important than ever to stay on top of cash flow, get paid promptly, and keep a close eye on costs.

“For anyone feeling the pinch, working with an accountant or bookkeeper to understand the ins and outs of your business can be monumentally helpful to steer you and your business in the right direction.

“Additionally, upskilling your own financial literacy can give you a more intimate knowledge of your business and where opportunities are for cost saving.

“Know Your Numbers is a free financial literacy program created by Xero to support all small businesses and nonprofits - Xero customers or not - to empower them with tools and support to help with their long-term success.”

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.