Retail growth slow but due to rise: Index

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The latest edition of the AFGC CHEP Retail Index shows that retail growth remains sluggish, but predicts the rate of year-on-year growth will increase by the September quarter.

The Index is a collaborative project between the Australian Food and Grocery Council (AFGC) and CHEP Australia, using CHEP's transactional data based on pallet movements to predict performance in the retail market.

The latest Index findings indicate an increase of 2.8 percent for the three months ending 30 September 2013, up from 2.6 percent year-on-year growth in the three months ending 30 June, which was the third consecutive quarter of decline in the rate of growth.

For the month of June, the Index indicates that the Australian Bureau of Statistics (ABS) will report year-on-year retail trade growth of 2.5 percent and turnover of $21.9 billion. The Index forecasts August year-on-year growth will be 2.7 percent, with turnover increasing to $22 billion.

AFGC CEO, Gary Dawson, said the situation is expected to improve towards to end of 2013.

"The retail environment remains challenging, reflecting subdued consumer confidence. Indications of growth improving later in the year once the federal election is out of the way are encouraging and would see improved consumer spending supporting retail sales growth," he said.

Overall, food is faring better than other retail sectors. Recent ABS statistics have shown improving year-on-year growth in food and grocery retail compared with overall retail sales growth. Results published by the ABS for May show food and grocery retail sales grew by 4.2 percent over the past year. In contrast, sales at clothing retailers were flat, sales at department stores contracted, and household goods retailers posted growth of about one percent.

The next AFGC CHEP Retail Index will be released in late October 2013.