Retail trade growth is expected to increase 4.3 per cent in the first quarter of 2016, according to the latest AFGC CHEP Retail Index.
The index, which is the lead indicator for retail sales growth in Australia, was four per cent higher in December 2015 compared with December 2014, despite slow growth leading up to the 2015 Christmas period.
The December quarter 2015 showed retail trade turnover of $24.72 billion with growth expected to pick up to 4.4 per cent year on year in February, yielding $25 billion to the retail sector.
The latest Australian Bureau of Statistics trend data indicates that despite household goods retailing easing lately, the sector continues to be the strongest performer, with its recent strength attributed to new home building and low interest rates.
Elsewhere, sales growth for clothing retailers and department stores is also outperforming the national average, whereas food retailers experienced relatively weak sales growth through much of 2015 and this has continued in recent months.
“It’s encouraging that retail performance has improved steadily over the December quarter, particularly in light of the difficult economic headwinds that are dampening household expenditure,” Australian Food and Grocery Council (AFGC) CEO Gary Dawson said. “Low interest rates, low unemployment and strong job growth are providing signals of a positive outlook for retailers.”
CHEP Asia-Pacific President Phillip Austin said expected stronger growth in the retail sector for early 2016 was most likely to be a result of lower interest rates, employment growth and lower petrol prices, with retailers expected to see some benefits.