Kiwi small business sales stagnate as agriculture shines in June

Small business sales in New Zealand remained largely unchanged in the June quarter, according to the latest Xero Small Business Insights (XSBI) data.

The figures reveal an ongoing trend of subdued sales performance, with overall Kiwi small business sales down by 0.1% year-on-year for the June quarter. This follows a marginal increase of 1.1% in the March quarter and a 0.5% decline in December, marking the third consecutive quarter where sales have lagged well behind the historical national average of 6.3% year-on-year growth measured between January 2017 and June 2025.

Xero's data also showed New Zealand's recent performance fell short of neighbouring Australia, which recorded a 3.0% year-on-year sales increase during the same period.

A closer month-by-month look did indicate a modest improvement in June 2025, with national sales rising by 4.4% compared to June 2024 - the strongest increase since April 2024. Despite this, the broader quarterly picture remains weak.

Regional differences

Sales weakness was especially pronounced in the North Island. Northland saw year-on-year sales fall 3.5%, while Wellington experienced a 3.1% decrease, and Auckland recorded a 1.3% decline compared to the same period last year.

The South Island exhibited stronger resilience. Otago sales were up 3.9% year-on-year, while Canterbury saw a 1.8% increase, bucking the national trend and supporting overall economic activity in those regions.

Sectors diverge

Across industry categories, the agricultural sector stood out, registering a 10.9% year-on-year sales increase for the June quarter. Agriculture's strong result builds on previous quarterly gains of 11.1% in March and 14.9% in December, effectively reversing what had been a prolonged period of lacklustre performance during the preceding 18 months.

Industries more affected by discretionary spending and interest rate changes, such as construction, continued to face difficult conditions. The construction sector saw sales decline by 6.4% year-on-year in the June quarter, a slump persisting since late 2023. The significance of this result is highlighted by Bridget Snelling, Country Manager – Aotearoa New Zealand at Xero:

"This is particularly concerning given construction's multiplier effect across the economy, from retail to manufacturing."

Retail sales in June 2025 were unchanged when compared with the same month in 2024, following a prolonged period of four consecutive quarters marked by year-on-year declines.

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

The hospitality sector faced the fifth consecutive quarter of year-on-year contraction, with sales in the June quarter down 2.1%.

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

Policy and planning

Despite repeated reductions of the Official Cash Rate by the Reserve Bank since August 2024, the XSBI data indicates that neither consumer nor business activity has recovered as anticipated. Snelling commented on the situation:

"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.

She further outlined the challenges small businesses face in the current environment:

"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 programme created by Xero to support all small businesses and non-profits - Xero customers or not - to empower them with tools and support to help with their long-term success."