Overall Australian retail sales expected to rise, but food retail sector under pressure: Latest CHEP Index figures

Posted by AFN Staff Writers on 29th July 2015

escalator-711793_640Australian retailers can expect a slight improvement in year-on-year sales growth in the coming months according to the eighteenth edition of the AFGC CHEP Retail Index, just released by the Australian Food and Grocery Council (AFGC) and pallet group CEPH. However the food sector is under pressure and showing slower growth.

Australian Food and Grocery Council CEO, Gary Dawson said, “It’s encouraging to see low interest rates and a pickup in jobs growth rate flowing through to stronger retail sales. In food

retailing, growth is lower than other retail sectors, but at 4 per cent or better, remains strong despite softening population growth, and is likely to continue to benefit from improved confidence and ongoing low interest rates.”

CHEP Asia Pacific President Phillip Austin said, “The Index, which is lead indicator for retail sales growth in Australia, was 4.2 per cent higher in June 2015 compared with June 2014.

“Looking ahead to the month of August 2015, there’s a continuation of the recent trend of improving retail sales growth, with year-on-year growth reaching 4.7 per cent.

“On a quarterly basis, the Index was 4.3 per cent higher in the June quarter 2015 compared with the June quarter 2014 and growth in the Index is expected to lift to 4.6 per cent year-onyear

by the September quarter 2015.”

The latest Australian Bureau of Statistics trend data indicates that household goods retailing continues to be the strongest performing retail sector, most likely on the back of low interest

rates and a strong lift in new home building. Australian Food News also believes the Federal Budget incentives for small business to make capital investment in new equipment may too have had an influence on this sector.

The low interest rates also appear to be supporting some other discretionary categories, including clothing sales which have strengthened since March 2015. However, food retailers have experienced a lower growth rate of around 4 per cent since late 2014.

The AFGC CHEP Retail Index is a collaborative project between the Australian Food and Grocery Council and CHEP Australia, powered by Deloitte. The Index uses CHEP

transactional data based on pallet movements and is a lead indicator of Australian Bureau of Statistics Retail Trade Data.

The next AFGC CHEP Retail Index figure will be released in late October 2015.