Modest recovery predicted in Australia’s retail sales growth

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Figures published in the 26th edition of the quarterly AFGC CHEP Retail Index indicate signs of a modest recovery in retail turnover growth in Australia as 2017 progresses. This follows a sustained period of softening growth over 18 months that has reflected uncertainty in Australian and global economies.

The index, which uses transactional data from CHEP pallet movements to provide a lead indicator of Australian Bureau of Statistics retail-trade data, predicts year-on-year growth in Australian retail turnover of 4.6 per cent for the month of June 2017 and 3.6 per cent year-on-year for the June quarter – which is up from a year-on-year rise of 2.6 per cent to March 2017. This is projected to continue with year-on-year growth figures for the months of August at 4.2 per cent and September at 4.1 per cent, respectively.

Despite a persistent degree of consumer caution and a competitive retail environment, Australia’s economic outlook over the coming 12 months is characterised by modest improvement, being boosted by factors such as a lift in global trade, China’s demand for commodities, inbound tourism as a result of strong economic growth in Asia, and growth in Australian household wealth.

“After a period of relatively subdued retail trade, it is encouraging to see signs of some positive momentum,” Australian Food and Grocery Council CEO Tanya Barden said. “We have seen food-retail spending, in particular, pick up and fill some gaps from weaker non-food retailing, with catered food driving most recent improvements. Household goods have been the best performer for non-food retailing.”

CHEP Asia Pacific President Phillip Austin says the reliability and efficiency of the supply chain continues to be a major factor in the success of Australia’s retail sector.

“Retail supply chains are already evolving to be more effective and sustainable in the face of increasing competition, emerging technologies and ever-changing consumer needs,” he said. “This may accelerate as firms look to capitalise on the stronger momentum forecast by the index.”