Australian retail growth slows in early 2015 but exports to grow
After a stronger-than-expected Christmas trading period, retail spending growth will slow heading into 2015, according to the sixteenth edition of the AFGC CHEP Retail Index released late last week.
The AFGC CHEP Retail Index is a collaborative project between the AFGC and CHEP Australia, powered by Deloitte. The Index uses CHEP transactional data based on pallet movements and is a lead indicator of ABS Retail Trade data.
The Index was 4.4 per cent higher in the December quarter of 2014 compared to the December quarter of 2013. However, retail sales growth is expected to slow over the first few months of 2015, with the March quarter results showing 2.4 per cent year-on-year growth.
Christmas trading saw increase
Christmas trading saw an increase in retail sales of 4.5 per cent year-on-year in the month of December, with turnover of $23.75 billion. However, growth in February 2015 is less robust at 2.5 per cent year-on-year, with turnover retracting to $23.6 billion, between December and February.
Lower Australian dollar positive for food and grocery exports
Gary Dawson, Australian Food & Grocery Council (AFGC) Chief Executive, said the lower Australian dollar was “positive news” for Australian food and grocery exporters.
Domestic market tough
However, Mr Dawson said the domestic market “remains tough” for manufacturers, “given below average consumer sentiment and the highest unemployment rate in more than a decade”.
“Manufacturers and retailers will be hoping the fall in oil prices and low interest rates are sustained, leading to improved consumer confidence in 2015,” Mr Dawson said.
‘Innovative approach’ to supply chain to help growth
President of CHEP Asia-Pacific, Phillip Austin, said that while growth in the AFGC CHEP Retail Index indicated “challenges ahead” for retail trade, CHEP believed an “innovative approach to the supply chain” could support retailers’ and manufacturers’ growth strategies.
“This will be a focus for us in 2015, as we collaborate with industry to bring new innovations to market to improve the way products move through the supply chain to the end consumer,” Mr Austin said.
The next AFGC CHEP Retail Index will be released in late April 2015.