Retail sales forecast to strengthen

Retail sales rose 5.8% in the March quarter and are expected to further strengthen, according to the 13th AFGC CHEP Retail Index. The Index was also 5.8% higher in March 2014 than March 2013 with a turnover in excess of $23 billion.

An increase of 6.6% is forecast over the 12 months to May 2014, with retail trade turnover forecast to reach $23.62 billion. Year-on-year retail trade growth for the June quarter is also expected to reach 6.6%.

“It’s encouraging that retail performance has improved across all sectors since mid-2013 - from 1.9% growth in June 2013 to 5.9% in February 2014. Retail sales growth is now at its strongest for more than four years,” said Australian Food and Grocery Council (AFGC) CEO Gary Dawson.

Low interest rates and the falling value of the Australian dollar are stimulating the Australian economy, the report shows, despite weak labour income and jobs growth.

Retail sales picked up strongly in late 2013, with retailers benefiting from an extended period of low interest rates, retail data from the Australian Bureau of Statistics shows. In fact, retailers experienced an even better sales result in the year to December 2013 than forecast in the 12th AFGC CHEP Retail Index.

“The continued strength in retailer sales over the past two quarterly results suggests a more stable and certain view of economic conditions. Expectations for the next quarter indicate a resilience in Australian retail supply chains and sales results,” said CHEP Australia and New Zealand President Phillip Austin.

The next AFGC CHEP Retail Index will be released in late July 2014