A small shift in spending could deliver an $11B boost for small retailers this Black Friday

Shifting just 10 percent of household spending from big retailers to small businesses could inject an additional $11 billion into New Zealand’s small business economy, according to new analysis from Xero.

The research, released ahead of Black Friday and the peak holiday shopping period, is based on Xero economists’ review of 2024 household consumption data. After removing categories unlikely to involve small businesses such as utilities, certain transport costs and communications. Xero estimates $110 billion in discretionary spending remains on the table. Redirecting even a small fraction of this, the company says, would have a transformative impact on small operators across the country.

Bridget Snelling, Xero’s Country Manager for New Zealand, says the figures highlight the power consumers hold at a critical time for the retail sector.

“November and December are the biggest months of the year for the retail industry. There is always a lot of noise coming from the big business retailers which can make the smaller retailers with their own unique offerings a lot harder to notice,” she says.

“We’re calling on all New Zealanders to consider local small businesses when they’re shopping over Black Friday and Christmas. Of course you need to consider your personal circumstances and household budgets, but even a small reallocation of purchases makes a big difference.”

The call to action comes amid a challenging period for small retailers. Xero Small Business Insights (XSBI) data shows retail sales remained negative for four consecutive quarters from March 2024 before lifting to 2.9% year-on-year in the September 2025 quarter.

However, jobs growth for the same period slid -1.2% y/y, indicating that confidence to hire has yet to rebound.

These findings mirror Retail NZ’s latest Retail Radar report, which reveals that while two-thirds of retailers remain optimistic about the future, 62% missed their sales targets over the past six months.

Retail NZ Chief Executive Carolyn Young says Kiwi retailers are adapting to the era of cautious consumer spending.

“Retailers are walking a fine line between caution and creativity. While some are investing in fresh product lines and in-store experiences, many are holding off on hiring due to financial constraints. It’s a pragmatic response to a challenging environment and caution is needed, as well as a strong strategy for the entire holiday season,” Young says.

She adds that the strengths of local operators extend beyond pricing.

“We hear time and again that local operators excel in their service and those personalised touches that offer meaningful engagement to customers… being competitive isn’t just about discounts.”

Black Friday remains a double-edged opportunity for small businesses, able to boost sales but also capable of eroding margins if discounting isn’t managed carefully.

“In a turbulent economy, to discount or not to discount is a tough decision. But regardless of where small businesses land, there are ways small businesses can capitalise on Black Friday and the holiday season while staying true to their values,” says Snelling.

Xero is also sharing practical tips for retailers preparing for the holiday rush: Review last year’s sales data, check margins before discounting, and use forecasting tools to understand how promotions and last-minute stock purchases could affect liquidity.

Snelling and Young discuss these trends in more depth on the latest episode of Xero’s Open for Small Business podcast.