Bridget Snelling: Xero Country Manager on the Small Business Insights report and the industry performances

Agriculture is leading the way as the country's top performing industry.  

Xero’s latest Insights report shows consistent under-performance in New Zealand’s small business sector in the past year, with sales falling by 0.1% in the June quarter. 

Country manager Bridget Snelling told Mike Hosking sectors that are more sensitive to consumer spending and interest rates are being hit hardest.  

She says construction is down 6.4%, retail is holding flat, and hospitality is down 2.1%, so it's tough conditions for small businesses.  

However, sales in the month of June rose 4.4%, the strongest monthly increase since April 2024. 

Snelling says we're in an unstable global economic situation, and people are not feeling confident to spend as they may have done in a more prosperous economic time. 

LISTEN ABOVE 

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Now small business dart up of the June quarter sales
still flat overall, down zero point one percent year on
Yeah no, but check the regional divide out a Tigo
up three point nine, Cannibalry at one point eight, which
means someone went backwards. This time it was North and
Wellington and Auckland. Bridget Snelling a zero's country manager back
with this, Bridget, very good morning to you.

Speaker 2 (00:17):
Good morning mate.

Speaker 1 (00:17):
If you look at the AG ten point nine eleven
in March fifteen and December for the quarter, I mean,
are they doing all the lifting or just a lot
of it?

Speaker 2 (00:26):
Well, they're doing a lot of it. I mean I
think that the data, the Zerosyll Business Insights data is
showing us that agree, it's having a really a strong
bounce back. That data is really impressive. But unfortunately other
sectors are not faring so well.

Speaker 1 (00:39):
Right, so one point one overall this is one point
one up in the March quarter, so we're down smidge.
What's happened there? Do you think? Well?

Speaker 2 (00:47):
Yeah, we're down zero point one percent for the March
quarter and that does continue a twelve month trend of
underperformance for small business sales. So we you know things,
I think of what it's telling us is that things
are still pretty tough out there. We're not seeing the
economic recovery for smeths that we would hope to have
seen from the ocr cut. So you know, we've seen
in June it's down, but actually the month of June itself,

(01:10):
in that quarter, we were up.

Speaker 1 (01:11):
Well, I was going to ask you about that. Four
point four is huge compared to what the overall number is.
What happened in June.

Speaker 2 (01:18):
Well, I've been asking myself the same thing. Yeah, there's
nothing in particular in the data to tell us exactly
why June has been so much stronger than April and May.
But so I think we can say, well, maybe there's
some green shoots here, maybe there's a little bit of
sign of recovery, but it's certainly certainly overall for the
past year, things have been still pretty tough for KII
small business.

Speaker 1 (01:37):
We'll know for once the July August ten and numbers
come in. Long term average that's six point three, So
that tells you where we've been at six point three,
So zero point one. We really are wading through mud here,
aren't we.

Speaker 2 (01:48):
Yeah, that's right, we're sort of flat lining. I guess
you could say, and we are you know, this as
well below the long term national average, as you've said,
and we are lagging behind Australia which has grown three
percent in that quarter. So we see that we have
still got sales week doesn't as you said, obviously it's
concentrated in the North Island. South Island is performing better
and agri is leading the way. So those are other

(02:09):
sectors that are more sensitive to consumer spending and interest rate.
It's like construction obviously down and quite significantly down six
point four percent, retails holding flat hospos down two point
one percent, so you know they are there are still
really tough conditions for those smeths and obviously with constructions
to climb, that's construction is obviously such a big sector
in the economy and has a much broader economic impact.
So I think that's definitely one that we're watching closely.

Speaker 1 (02:31):
And here's the problem your main sentence, I mean Auckland
and Wellington. Wellington's down three point one, Orkands down one
point three. I mean that's the Auckland, especially massive populations.
You if your engine's not working, you're in trouble, aren't you.

Speaker 2 (02:42):
Well, that's right, I mean, most of our small businesses
in New Zealand are concentrated in Auckland. Obviously Wellington you know,
as well being a slight smaller city, but yeah, obviously
Auckland is where we want to see strong economic activity.
So certainly a concern that Auckland's not faring so well.

Speaker 1 (03:00):
All the people you talk to, this green shoot talk
that's been going on all year, do you believe it?
Is it real or is it just noise?

Speaker 2 (03:09):
Look, I think for some businesses it's real, But most
of the businesses that I talk to are still finding
things really tough, and actually some of them are super
frustrated that there is chad of green shops when they
are not yet experiencing it themselves. So I think it's something.
You know, we are obviously had a very unstable global
economic situation right now. I think there's a lot of

(03:30):
consumer uncertainty and so probably people are not feeling confident
to spend or you know, as they may have done
it in a more prosperous economic time. So that's impacting
spas right because obviously they're ninety seven percent of our economy,
they're really feeling the pinch sell So it's still still
really important. All those messages we've been saying for a
couple of years now about helping smith to plan ahead,

(03:52):
watching cash flow, paying invoices as soon as you can
to help with a business's cash flow, those things still
really apply. It's parsically not out of the woods.

Speaker 1 (04:02):
Excellent insight, Bridget appreciated as always. Bridget Snelling, who's the
zero country Manager, with us this morning for more from
the mic Asking Breakfast, listen live to news talks it'd
be from six am weekdays, or follow the podcast on iHeartRadio.