With the holiday sales season in full swing, new data from the Commonwealth Bank reveals small businesses could be set to receive a much-needed end-of-year financial reward as a result of revenue generated during the festive period.
Over the past two years, CBA business customer data shows overall spend during the festive period1 is 11 per cent higher than the average monthly turnover.
As an early indication into the business types primed for sales growth, the following sectors saw the strongest performance2 in December 2023, in comparison to the month prior:
- Motion pictures (+164 per cent)
- Book stores (+96 per cent)
- Hobby, toys and game shops (+53 per cent)
- Amusement parks, circuses, carnivals, and fortune tellers (+52 per cent)
- Home furnishing (+45 per cent)
- Gift, card, novelty, and souvenir stores (+41 per cent)
With the Australian Retail Association predicting a record spend of $6.7 billion during Black Friday and Cyber Monday in 2024 - an increase of 5.5 per cent year on year - this demonstrates the importance of the holiday sales season for many Australian small businesses, particularly off the back of a challenging year and rising operational costs and economic pressures.
CommBank Executive General Manager Small Business Banking, Rebecca Warren, said the spend data provided valuable insights for small businesses seeking to take advantage of big upcoming shopping events in the festive season.
"Black Friday and Cyber Monday mark the start of a busy season for Australian small businesses as we head into the last month of the year. As consumer demand for a good deal reigns and more competition enters the market, it's not too late for small businesses to take advantage of tentpole moments like these major shopping events.
"Our data shows the top five best performing industries by spend during the 2023 festive season were restaurants and bars, beauty and barbershops, clothing and department stores, homewares and travel. While these industries continue to perform well, the festive season generates gains for the broader small business community, driving revenue into supporting sectors like marketing and advertising, printing, courier and delivery services."
Not to be outdone by their metro counterparts, regional small businesses can also expect to achieve strong sales this festive season. While fast food, cafes and restaurants, and beauty and barber shops are consistently popular choices
around the country, people tend to spend more money in regional areas on lodgings, hotels and resorts as well as drinking establishments than in the major cities where purchases at bakeries and jewellery stores are more common.
To end the year on a strong note, Ms Warren shares her top three tips on how to prepare your small business for the holiday season and beyond.
1. Prioritise payments and optimise your cash flow
Cards and digital wallets are the most common payment methods in Australia. The capability to make and take payments at any time is essential for your operations to run smoothly and reliably while providing customers with the best digital customer experience.
It's more important than ever that merchants have a payment device that provides multiple connectivity options and offers a dual sim and Wi-Fi capabilities. This ensures small businesses can stay connected and keep up and running at all times, giving small businesses owners greater reliability and resiliency even if unexpected problems arise.
Also remember to keep a close eye on your cash flow to ensure you are abreast of your financial situation and can mitigate any potential shortfalls. As the cost of doing business rises, making faster and better business decisions will increasingly depend on maintaining smart, real-time visibility over your cash flow.
2. Plan ahead
For many small businesses, the holiday season contributes to the bulk of their yearly sales. However, it's also important to plan ahead and set yourself up for success in the new year. Recent research commissioned by CommBank1 shows 70 per cent of Australian small to medium businesses have had to cut costs in the last 12 months due to economic pressures, with marketing being one of the top categories where they've reduced spend.
