Factors that led to B.C. seeing sharpest small business sales drop in Canada
Over the second quarter of the year, sales have been lagging for B.C.’s businesses.
According to Xero’s small business insights (XSBI) report, B.C. had the sharpest small business sales decline of all the regions it looked at, which included Alberta, the Maritimes, and Ontario.
Year-over-year, B.C. business sales fell by 1.7 per cent. Nationally, that fall was just 0.6 per cent and in Ontario by 0.3 per cent.
Meanwhile, Alberta and the Maritimes actually saw sales growth year-over-year, at one per cent for the former and 0.2 per cent for the latter.
The good news for B.C. businesses is that they were paid faster than any other region, at an average of 25.7 days for them to get their payments.
Alberta’s average was 28.4 days, Ontario’s was 30, and the Maritimes was 31.8 days.
“B.C. is the outlier this quarter. It had the weakest sales of any region tracked, but its businesses get paid faster than anyone else’s. For B.C. owners, the problem is demand rather than collections,” said a spokesperson for Xero in an email to Daily Hive.
Xero attributed the lower sales to the recent surge in gas prices, which have been elevated since the start of the U.S.-Iran war.
“Ongoing higher-than-usual gasoline prices continue to introduce headwinds for small businesses, who can find themselves squeezed from both sides should high prices remain.”
Not only do rising fuel costs have a direct impact on small businesses’ operations, but they also mean that consumers have less disposable income to spend.
Merchant Growth, a financial services company, also found earlier this year that B.C. businesses were struggling with high fuel prices, as well as tariff-related impacts.
The founder and CEO of Merchant Growth, David Gens, told Daily Hive that rising oil prices affect the entire supply chain, from restaurants and retailers dealing with higher shipping costs to contractors and tradespeople who drive a lot for work paying more at the pump.
What about a national level?
At a national level, Canadian businesses in aggregate are also making fewer sales than a year ago, although they are still doing better than B.C.
Xero said that the 0.6 decline in sales is the “third consecutive quarter of sales being lower than a year ago, with payment times also remaining elevated.”
Ashalee Mohamed, Xero’s country manager for Canada, said that businesses across the country are “navigating ongoing cost pressures and cautious consumer spending
“While some sectors may benefit from broader market trends, many small businesses will continue to focus on protecting cash flow, managing expenses and adapting to changing customer demand.”