The AFGC CHEP Retail Index has shown strong year-on-year growth in 2014 to date, peaking in January at 5.7%. But growth has eased in the recent months and the latest index predicts a definite softening in the lead up to Christmas.
Year-on-year growth of 4.8% in the September quarter is indicated. According to the Index, this growth will slow to 3.2% for the December quarter.Retail trade turnover is still expected to increase modestly from $23.26 billion in September to $23.35 billion in November.
This year’s warmer than usual winter has been blamed for weak clothing sales. The Australian Bureau of Statistics (ABS) data shows no growth in clothing retail over the past year.The same data, however, shows that the food and household goods sectors recorded year-on-year sales growth of 5.5% to August 2014.
Australian Food & Grocery Council chief executive officer, Gary Dawson noted, “Looking ahead to Christmas, the AFGC CHEP Retail Index indicates the trading year will finish weaker than it began, although traditionally the food and grocery sector is more buoyant at Christmas than other sectors.
“Interest rates remain low but consumer sentiment hasn’t recovered significantly since the May Federal Budget. Rising unemployment is also having a dampening effect on retail trade growth and a lift in the labour market is needed to underpin a stronger rate of income growth and therefore retail spending.”
CHEP Asia-Pacific president, Phillip Austin, added, “It is encouraging to see the Index anticipating continuing year-on-year growth for the important December quarter. With a range of factors driving variability in this seasonal quarter, CHEP is actively collaborating with manufacturers and retailers to deliver certainty to their supply chains as they look to maximise on-shelf availability.”
Read the full AFGC CHEP RETAIL INDEX OCTOBER 2014 here:
