The latest MYOB Business Monitor: SME Performance Indicator shows retail small businesses have been impacted the most by inflationary pressures, with rate cuts key to stimulating enhanced spending this shopping season.
The SME Performance Indicator comprehensively reviews the health of the retail sector, plotting the impact of a reduction in discretionary spending. This edition, also informed by consumer research, the MYOB Consumer Spending Snapshot, reveals more cautious spending by Australians in the lead up to Christmas with 24% of those polled planning to spend less on Christmas this year. However, one in five (22%) would spend more than planned this festive season if a rate cut was introduced before the end of the year.
The survey revealed changes in discretionary spending ahead of the retail industry’s busiest time of year. More than half (52%) expect to get their Christmas shopping done in November, while 53% of respondents intend to take advantage of Black Friday sales this year (down from 75% last year).
MYOB CEO, Paul Robson said the current period of softness across the small business sector, exhibited in the MYOB SME Performance Indicator, highlights the challenging conditions that small businesses have been facing.
“While inflation is moderating, persistent cost-of-living pressures coupled with still high interest rates have caused many households to continue to hold back spending on non-essential goods and services. This is particularly affecting the retail and hospitality sectors,” he said.
“It’s been a challenging winter for small businesses. Prioritising spending with local businesses heading into this important festive period will make a significant difference to this vital community of employers and GDP contributors and see them through to a stronger 2025.”
Overall, the MYOB SME Performance Score for this quarter is -2.3, which is a 0.3 score reduction from May.