Business growth

Strong Small Business Growth Despite Omicron Wave, Xero Data Shows

Anthony Gardiner, founder of pet food company Fussy Dog, says the Covid-19 pandemic has been a perfect time to get into catering to pampered pooches.

Gardiner started the company after losing his job in March 2020 and set his sights on making a high-end gravy powder for dogs that could convince fussy dogs to eat their dinner without their owners having to sit down. ruin.

Since then, business has been booming. Fussy Dog Co. products were stocked in 140 stores across the country, and sales steadily doubled every few months.

February data from Xero showed that more SMEs (small and medium-sized enterprises) were in equally strong positions in the first months of the year as sales picked up despite an increase in Omicron business.

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But even for Gardiner and his successful small business, things haven’t been quite smooth.

“As a small company with no money for marketing, almost all of our sales come from people seeing our products on the shelves. So if something happens that makes people less confident to come out, like an Omicron spike, then we see a definite decline in sales,” Gardiner said.

But despite declining sales, the overall story of Fussy Dog Co. has been one of growth. The company was expanding production to a 1,000 square foot warehouse and was considering exporting to Australia and China.

Anthony Gardiner says now is the perfect time to get into pampered pooch catering.  Data from Xero shows that other small businesses are also seeing success.

JOHN KIRK-ANDERSON/Stuff

Anthony Gardiner says now is the perfect time to get into pampered pooch catering. Data from Xero shows that other small businesses are also seeing success.

Gardiner also developed a bacon-flavored tooth-cleaning powder for dogs, which he liked to try for himself.

“It’s good to use in the morning, but it’s a bit strange to go to bed at night with a bacon-tasting mouth. But it keeps your teeth clean.

Data from Xero showed that other SMBs also performed well during the Omicron period with February sales up 13.3% year-on-year.

Xero’s managing director for New Zealand and the Pacific Islands, Craig Hudson, said the rise in sales was due to the strong performance of the construction and manufacturing sectors, which increased by 16.8 respectively. % and 15.7%.

“Our small business community is now used to adapting to disruption. The data shows the industry has done incredibly well so far with Omicron, but there are still challenges ahead with cases peaking in March,” Hudson said.

The only sector whose sales fell in February was the hotel industry, which fell 3%.

According to Xero Managing Director for New Zealand and the Pacific Islands, Craig Hudson, New Zealand's SME economy is currently outperforming Australia and the UK according to the Xero Small Business Index. .

Provided

According to Xero Managing Director for New Zealand and the Pacific Islands, Craig Hudson, New Zealand’s SME economy is currently outperforming Australia and the UK according to the Xero Small Business Index. .

All sectors have seen wage growth this year; the average was 4.3% in February, after rising 3.7% in January.

Hudson said while wage increases were a good sign for the economy in general, they could drive up the cost of consumer goods.

“It’s a pressure point for small businesses that will eventually increase the cost of operations and could contribute to inflation if not accompanied by increased productivity.”

Hudson said New Zealand’s SME economy performed better than Australia and the UK in February according to the Xero Small Business Index.

Infometrics senior economist Brad Olsen said Xero data shows the benefit of everything SMBs have learned while staying afloat during the Covid-19 pandemic.

“We see that agility come through, the ability that they’ve learned to be able to change operations quickly. It is surely reassuring to see these numbers coming out of Xero,” Olsen said.

Infometrics senior economist Brad Olsen said that while the signs were good for the start of this year, business owners should be worried about what might happen for the economy.

MONIQUE FORD/Stuff

Infometrics senior economist Brad Olsen said that while the signs were good for the start of this year, business owners should be worried about what might happen for the economy.

But at the same time, companies weren’t completely out of the woods and there were still major global issues to grapple with, Olsen said.

Higher mortgage rates and high inflation rates would make it harder for SMEs to get households to spend on their goods and services, he said.

“Companies should be nervous about what’s coming. New Zealand is in a very different position to what it has been in recent years. With Covid in the community at the same time bigger economic headwinds are starting to kick in.

Olsen said many countries around the world have seen their economies rebound to normal levels after the Omicron wave hit.

“But we continue to see differences in corporate fortunes across industries. Tourist operators remain hard hit, despite the excitement around the reopening of borders. It’s just a reminder that the SME economy has many different players and there is no single story to tell.