Pallet index predicts steady growth

Pallet movements across the Australian retail supply chain in the past three months indicate a modest retail growth of three per cent in the December 2012 quarter is set to continue in the first three months of 2013, the latest CHEP-Australian Food and Grocery Council (AFGC) retail index suggests.

The index uses CHEP transactional data based on pallet movements to provide an early indicator of official Australian Bureau of Statistics retail trade data.

The latest index, released today, showed three per cent growth in December 2012 compared with December 2011, with this level of year-on-year growth expected to hold steady in February 2013 and then also in the 2013 March quarter – with both forecast to be at three per cent.

In dollar terms, retail trade turnover is expected to rise moderately, from $21.5 billion in December 2012 to $21.6 billion in February 2013.

AFGC chief executive, Gary Dawson, said that while this was only a modest increase, there was hope other factors could lift spending later in the year. He also said this would be a good time for food and grocery companies to invest in equipment and innovation to put them in good stead for the remainder of the year and onwards.

“The AFGC CHEP Retail Index suggests that the start of 2013 is unlikely to produce the lift in sales retailers have been hoping for; however, some support could come from low interest rates and the increase in consumer confidence that often accompanies this,” Dawson said.

“Trading conditions remain challenging for food and grocery manufacturers. Planned capital investment to improve efficiency and productivity and a focus on innovation to capitalise on expanding Asian markets will be among the priorities for the industry in 2013.”

CHEP Australia & New Zealand president, Phillip Austin, said: “In what is at best a moderate growth environment, businesses are under increasing pressure to increase efficiencies and find new ways to meet their customers’ needs.”