The 11th edition of the AFGC and CHEP Retail Index has been released, suggesting that slowing year on year retail sales may result in a challenging trading period during the festive season.
Data from the Australian Bureau of Statistics (ABS) states that discretionary spending over the past year has resulted in varying performance in the retail sector, with food retailers performing best.
A main contributor to the reduction in spending is believed to be the slowing of the mining boom as ABS data shows a reduction in sales growth in Western Australia from 10 percent to 2 percent over the past year.
According to the report, the Index was 1.8 percent higher in the September quarter than in the same period last year, and growth is expected to further ease to 1.5 percent in the December quarter.
For the September quarter, the Retail Index indicates that the ABS is likely to report a 1.9 percent increase in year-on-year retail growth and turnover of $21.89b. Forecasts for November year-on-year growth estimate growth at 1.5 percent – dropping to $21.85b.
“Retail sales growth is certainly underperforming against longer term trends, with the growth rate halving over the course of 2013,” says Australian Food & Grocery Council CEO, Gary Dawson.
“Food retailers are performing best with sales growth of around 3 per cent over the past year. Retailers will be hoping the recent improvement in consumer confidence will assist sales growth this Christmas.”
Phillip Austin, president of CHEP Australia and New Zealand said that the findings indicate a need for efficiency in supply chains to maximise profitability during the Christmas period.
“AFGC CHEP Retail Index forecasts highlight the criticality of effective and efficient supply chains in maximising on shelf availability and promotion in the peak Christmas period, and we will be focusing our efforts on helping retailers have product where they need it, when they need it over what is traditionally the busiest retail period of the year.”