Southern businesses buck trend
Across the nation, sales weakness is uppermost in the north, with Northland down 3.5% in the June quarter compared with the corresponding period a year ago.
A small business report by accounting software company Xero shows Wellington is back 3.1%, but Auckland declining 1.3%.
In contrast, South Island centres are outgunning the national average, with Otago leading the charge, up 3.9% year-on-year for the quarter and Canterbury tracking 1.8% growth.
This coincides with the agriculture sector making strong sales.
The Xero Small Business Insights report revealed weak small business sales nationally in the June quarter, in line with an underwhelming result the past year.
Overall, small business sales fell by 0.1% in the June quarter year-on-year, following a modest 1.1% rise in the March quarter and a 0.5% decline in the December quarter.
The results are well back on the long-term national average of 6.3% year-on-year from 2017 to mid-2025 and behind Australia's 3% sales growth in the June quarter.
Breathing some life nationally is a strong 4.4% sales rise over the month of June compared with the same month a year ago.
Also bucking the overall national trend are agriculture sales, growing 10.9% year-on-year in the June quarter.
This follows 11.1% growth in the March quarter and 14.9% in the December quarter, reversing 18 months of slow sales.
Xero said industries more sensitive to discretionary spending and interest rates were facing tougher conditions with construction sales falling 6.4% in the June quarter — in a decline continuing since late 2023.
Country manager Bridget Snelling said construction was concerning as it had a multiplier effect across the economy, from retail to manufacturing.
Retail sales were unchanged in June compared with the same month a year ago, 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," she said in a statement.
Hospitality sales fell by 2.1% in the June quarter, marking the fifth straight quarter of backwards results for the sector.
"These subdued sales figures highlight an ongoing challenge for Kiwi small businesses. 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."
She said businesses were finding it difficult to plan because global economic uncertainty was adding to the pressure.
This underlined the importance of staying on top of cash flow, getting paid promptly, and keeping a close eye on costs, she said.
tim.cronshaw@odt.co.nz
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