The latest AFGC CHEP Retail Index predicts modest retail sales growth in Q1 2018 despite improving business confidence.
According to the index, which monitors pallet movements, retail sales showed some strength in late 2017 – but not enough to offset the soft growth in average retail spending over the rest of the year.
Online retail continued to grow its share of the overall retail market during 2017.
Looking forward, the economic environment is supportive of potential improvement in retail sales growth in 2018 when improved business confidence, investment and labour market outcomes flow through to consumer spending.
Here are the key figures from the index:
- 3.5 per cent year-on-year retail turnover growth to the month of December 2017, softening to 2.4 per cent year-on-year for the month of February.
- On a quarterly basis, 2.4 per cent year-on-year growth to the December quarter, trending to 2.6 per cent year-on-year for the March 2018 quarter.
David Rumbens, partner at Deloitte Access Economics, said shaky retail sales growth during most of 2017 reflected fragile consumer confidence, continuing underemployment and a lack of wage growth.
"However, the improvement in retail sales growth towards the end of the year was some reward for retailers linked to the stunning rate of jobs growth which has also been seen through 2017,” he said.
AFGC CEO Tanya Barden said: “After a tough trading year, the boost in late 2017 trade and continued improvements in the economy are good signs. While the AFGC CHEP index has not predicted an immediate uplift in spending in early 2018, we are hopeful of more sustained growth as 2018 progresses.”
