Movements of pallets tracked by CHEP indicate soft conditions in the local retail sector are set to continue.
Movements of pallets tracked by CHEP indicate soft conditions in the local retail sector are set to continue.
Movements of pallets tracked by CHEP indicate soft conditions in the local retail sector are set to continue.

Pallets show retail growth on pause

29 April 2013

Growth in retail trade decreased marginally in the first three months of 2013 and is expected to ease further as the year continues, according to the most recent study forecasting retail trade through the volume of pallet movements in the country.

The latest AFGC-CHEP Retail Index showed 3.0 per cent growth in the March quarter compared to last year, but forecasts this growth will ease back to 2.6 per cent in the June quarter.

For the March quarter therefore, the index predicts that the Australian Bureau of Statistics (ABS) will report year-on-year growth of 2.6 per cent, with turnover of $21.7 billion.

Further ahead, it forecasts retail trade growth in May will be 2.8 per cent year-on-year, with turnover increasing to $21.9 billion.

Australian Food & Grocery Council (AFGC) chief executive, Gary Dawson, said the latest index, which tracks pallet movements through logistics company CHEP's nationwide network to extrapolate on wider economic trends, indicated the retail sector was still struggling.

“Retail conditions have been soft through the beginning of 2013, and the index confirms that consumer confidence remains fragile, with low interest rates yet to bring a sustained lift in the retail sector,” he said.

Recent ABS statistics have shown a more solid rate of year-on-year growth in food and grocery retail than overall retail sales growth. Food retail growth was 4.6 per cent in February 2013. Spending on cafés, restaurants, and takeaway food is also seeing a similarly solid growth rate.

By contrast, department stores experienced year-on-year sales growth below one per cent in February as growth in online sales and ongoing price deflation weighed on non-food retailing.

CHEP Australia & New Zealand President, Phillip Austin, said the index's value was its ability to present a holistic view of the retail sector in general.

“We’re pleased to tap into CHEP’s rich data to provide a reliable and robust indicator for the retail sector which has the ability to look at both food and non-food segments across the supply chain,” he said.