Xero : 01/02/2021 - New Xero data shows decline in UK small business revenue in December

New Xero data shows decline in UK small business revenue in December

December 2020 was largest year-on-year decline in revenues since its lowest drop in May - but jobs

remain stable

London - 28 January, 2021​- Xero​ ,​the global small business platform, today released its latest Xero Small Business Insights (XSBI) data, produced in partnership with research company Alphabeta (part of Accenture). The data shows that December was one of 2020's worst months for small businesses in the UK.

There were signs of revenue slowly starting to recover during the summer but this has reversed in recent months. December saw revenues fall 10.3% year-on-year, the biggest drop in revenues since May (-23%). The data also shows that the furlough scheme continued to stabilise jobs.

Xero's analysis of hundreds of thousands of small businesses, shows a protracted decline in year-on-year revenue growth since the most recent peak (-0.1%year-on-year) in September. The XSBI data continues to show the impact of restrictions on trading. Hospitality businesses experienced a 52% decline in year-on-year revenue in December.

Small retailer revenues were 10% lower than the previous year in December 2019. This reinforces the new Office for National Statistics (ONS) data suggesting that the volume of retail sales climbed just 0.3% in December from the previous month, with 2020 seeing the biggest drop in retail volumes since records began in 1997.

Small business jobs remain stable

The latest XSBI data shows that hiring patterns in the small business sector remain relatively unchanged as the furlough scheme continues to allow employers to retain staff.

Jobs remained 3.8% lower in December than pre-crisis levels, showing little recovery since the COVID-19 pandemic first took effect.

The hardest hit sectors remain those most impacted by closures: arts and recreation (-22.9% compared to pre-crisis) and hospitality (-18.4%). Both of these sectors have recorded ongoing declines in jobs since March as restrictions continue.

Sectors less impacted and able to grow jobs since the pandemic hit include the information, media and communications sector (+6.2%), retail trade (+3.7%), professional services (+2.1%) and construction (+1.4%).

Payment times improve

The data shows that average payment times have continued to improve, with the average time for a 30-day invoice to be paid after issue seen at 29.7 days in December. This is 1.2 days shorter than pre-crisis levels and 7.6 days faster compared to the peak of the crisis in May.

The slowest paid invoices are now being paid on average 2.7 days faster than pre-crisis. However, businesses with invoices falling into this category are still having to wait 59.3 days for payment - almost double the overall average payment time.

Gary Turner, Managing Director and co-founderof Xero, said: "With​ the vaccine programme now well underway, our data highlights the critical need to ensure our beleaguered SMBs get the government support they need not just to survive, but to be fully prepared to benefit from the economic recovery when it comes."

Xero has identified the key areas of Government support needed by small businesses in order to rebuild.

The Roadmap​to Recovery​policy recommendations, covering technology access, digital skills development and strengthened local communities. The manifesto is part of Xero's campaign to support small business recovery.

More information on the December metrics is available in the INSERT​ LINK HERE.​

Media contact

Clemmy Stopford

Xero Communications

[e-mail][phone]

About Xero

Xero is a cloud-based accounting software platform for small businesses with 2.45 million subscribers globally. Through Xero, small business owners and their advisors have access to real-time financial data any time, anywhere and on any device. Xero offers an ecosystem of over 800 third-party apps and 200 plus connections to banks and other financial partners. In 2020, Xero was included in the Bloomberg Gender-Equality Index and recognised by IDC​ MarketScape​as a leader in its worldwide SaaS and cloud-enabled small business finance and accounting applications vendor assessment.

About Xero Small Business Insights

The Xero Small Business Insights (XSBI) program provides analysis on the sector's health, with its metrics based on anonymised, aggregated data drawn from hundreds of thousands of Xero subscribers. The result is a picture of business conditions that's more accurate than most private surveys, which typically have a far smaller sample size, and more frequently updated than much of the data on small business. Xero is currently producing a series of specialised monthly metrics, providing a view of the impact of COVID-19.

About AlphaBeta Australia (part of Accenture)

AlphaBeta Australia (part of Accenture) is a research firm with offices in Sydney, Canberra and Melbourne. It specialises in combining advanced analytical techniques and innovative data to generate new insights and fresh perspectives on the challenges facing business and government.