AFGC CHEP Retail Index Suggests Slowing Retail Growth

Editor’s note: Pallet usage is generally a meaningful indicator of economic activity. In Australia, the practice has become institutionalized through the collaboration of AFGC, CHEP, and Deloitte in producing their Retail Price Index.

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 today.

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.

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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.

Australian Food & Grocery Council (AFGC) Chief Executive, Gary Dawson, said: “The lower Australian dollar is positive news for Australian food and grocery exporters; however, 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.”

President of CHEP Asia-Pacific, Phillip Austin, said: “While growth in the AFGC CHEP Retail Index indicates challenges ahead for retail trade, we believe through taking an innovative approach to the supply chain, CHEP can 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.”

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 next AFGC CHEP Retail Index will be released in late April 2015. To read the Index and access more background information, visit www.afgc.org.au or www.chep.com.