The Australian retail sector is expected to see a further slowing in growth nationally, with the AFGC CHEP Retail Index showing growth of 4 per cent year-on-year in the March quarter, slowing to 3 per cent by the June quarter.
Within this broader trend, on a monthly basis the index predicts retail trade turnover for the month of March to be $24 billion, representing a year-on-year growth of 4.2 per cent for that month. This slightly higher than expected growth for the month was likely due to the Reserve Bank’s February interest rate cut and earlier falls in petrol prices, which helped to support the stronger levels of consumer sentiment in the first few months of 2015.
However, the downward trend remains as we head into May, with turnover to soften to $23.9 billion and year-on-year growth to slow to 3.1 per cent for May.
Australian Food and Grocery Council deputy chief executive Dr Geoffrey Annison said: “The growth in food retailing has eased a little in recent months, and is now slightly below the growth rate for total retail sales. As the Australian economy continues to unwind from the mining boom, a stronger labour market will be needed for strength in retail sales growth to be sustained.”
CHEP Asia-Pacific president Phillip Austin said: “These trends indicate why there is considerable activity across all the retailers, as they reconfigure their supply chains to optimise for available growth.”
The AFGC CHEP Retail Index is a collaborative project between the AFGC and CHEP Australia, developed by Deloitte. The index uses CHEP transactional data based on pallet movements and is a lead indicator of ABS Retail Trade data.