A slowdown in traffic of pallet movements in the local retail supply chain could point to a quiet Christmas period for the country's retailers, the latest Australian Food and Grocery Council (AFGC)-CHEP Retail Index predicts.
The latest edition of the index, which uses CHEP transactional data based on pallet movements to forecast the likely quarterly trade data ahead of the Australian Bureau of Statistics (ABS), predicts modest year-on-year retail growth of 2.9 per cent for the December quarter, below the 10-year average of five per cent and softer than year-on-year growth in the September quarter of 3.7 per cent.
The AFGC and CHEP say, however, there could be some cause for optimism. While retail trade turnover will experience a slight contraction from $21.56 billion in September to $21.52 billion in November, lower interest rates may help to provide a boost to retail spending, the index indicates.
"The Reserve Bank’s decision to cut interest rates over the last six months has helped boost retail trade conditions, but overall the broader economic backdrop is creating a soft retail environment heading into Christmas,” the AFGC's chief executive, Gary Dawson, said.
“We’re hoping that another cut in interest rates will send the right signals to households so they embrace this summer season with more optimism.”
CHEP Australia & New Zealand President Phillip Austin also said the summer period may offer conditions for retail growth.
“Over the past 12 months AFGC CHEP Retail Index predictions for year-on-year movement and retail trade turnover have been directionally very accurate. Growth, albeit modest, offers encouragement for businesses in the retail supply chain heading into the busiest retail period of the year,” he said.
“Further, the prospect of improved summer conditions may offer stronger growth prospects in traditional seasonal categories. CHEP will be working with its customers to ensure their products get to market with maximum efficiency and are on shelf when and where they are needed.”
CHEP's latest 2012 retail index predicts subdued Christmas retail based on forward pallet movements
