Christmas retail boost won't last: index

The latest edition of the AFGC CHEP Retail Index has predicted that a lift in retail turnover growth over the December quarter will be short-lived, with the early months of 2017 expected to see a return to the trend of slowing growth that characterised 2016.

Year-on-year growth during the December quarter is estimated to be 3.3%, including year-on-year growth for the month of December of 3.0% — notably a like for like comparison of the same period and, therefore, not simply due to the occurrence of Christmas.

Thereafter, the year-on-year Retail Index growth for the month of February 2017 is expected to be 2.0% and growth for the March quarter is predicted to be just 1.9%.

The Index and ABS data indicate that 2016 was characterised by a degree of inertia, with growth in each month a little lower than the month before, apart from the latter months of the year, where ABS retail trade results proved to be slightly higher than the AFGC’s previous predictions.

Australian Food and Grocery Council CEO Gary Dawson, said: “The rise in December quarter retail sales growth is encouraging after a challenging year. However, following this temporary relief, economic trends still point to uncertainties in the national and global economy that are leading consumers to become more cautious. While the residential housing boom, low interest rates and the shift of focus from mining states have bolstered retail turnover in Sydney and Melbourne, these benefits also appear to be starting to run out of steam in early 2017, with modest employment growth, low wage growth and a recent downturn in personal debt affecting retail trade generally.”

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.