Retail growth to improve post-election: AFGC CHEP Retail Index

Growth in retail sales continued to decline through the June quarter, but the rate of year-on-year growth will increase by the September quarter, the AFGC CHEP Retail Index predicts.

The Index shows an increase of 2.8% for Q3 2013, up from 2.6% year-on-year growth in Q2, which would be the third consistent quarterly decline in the rate of growth.

For June 2013, the Australian Bureau of Statistics will report year-on-year retail trade growth of 2.5% and turnover of $21.9 billion. The AFGC CHEP Index forecasts August year-on-year growth will be 2.7%, with turnover increasing to $22 billion.

“The retail environment remains challenging, reflecting subdued consumer confidence,” said Australian Food and Grocery Council CEO Gary Dawson. “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.”

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 the month of May show food and grocery retail sales grew by 4.2% 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 1%.

“CHEP’s data insights support the view that the Australian economic landscape and retail environment are today something of a patchwork,” said CHEP Australia & New Zealand President Phillip Austin.

“The predicted retail trade growth to August 2013, as well as inventory and consumer confidence indicators, suggest more of the same in the first quarter of the 2014 financial year.”

The Index and further background information is available here.