Omicron catalyst for ‘shadow lockdown’ business dip
Small business suffers significant hit after volatile summer trading
Indicative of the impact Omicron has had on consumer spending and the flow-on effect for small business, new data released by accounting software platform Xero’s Small Business Index shows a decline of six points during the first month of 2022 to 86 points, a dip largely attributed to the surge in Omicron cases across the country.
The decline is seen as a significant reduction from the high in November (107 points) and comes after two months of strong sales growth, when small businesses made the most of reduced lockdown restrictions and festive season spending.
Xero managing director Australia and Asia, Joseph Lyons said when looking at January’s decline after the highs of Christmas trading in November and December, there was no doubt the Index reflects the heightened volatility many small business owners have experienced these past few months.
“Xero’s data tells us that small businesses can bounce back from tough times, and with COVID-19 restrictions easing, case numbers falling and national and international travel returning, there’s cause to be optimistic,” he said.
The Xero data shows December sales growth almost doubled its average pace at 15.1 percent year-on-year (y/y).
However, post-festive period sales growth slowed to 5.7 percent y/y which Xero indicates was expected as the number of Omicron cases grew significantly.
Sales in NSW (+6.4 percent y/y) and Victoria (+4.3 percent y/y) were well down on the growth rates recorded in December (14.8 percent y/y and 15.4 percent y/y, respectively) as small businesses and customers were impacted by rising COVID-19 cases.
Sales in Queensland also slowed, from 14.6 percent y/y in December to 7.4 percent y/y in January.
Xero said the strong tourism focus on the state may have helped it to maintain a stronger sales growth rate than NSW and Victoria despite also having rising COVID-19 cases.
To download the full January results, including industry and regional breakdowns, go to the website here.
Mike Parker-Brown is a UK-trained and qualified journalist and an award-winning travel communicator with more than 30 years experience.
Since 2002, Mike has worked as a freelance writer and PR consultant providing his services to major organisations in Australia and internationally in the tourism, aviation, hospitality, recruitment and export marketing sectors.
