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Retail slowdown looms

Grocery StoreThe Australian retail sector is expected to see a further slowing in growth nationally with the Australian Food and Grocery Council (AFCG) CHEP Retail Index showing growth of four per cent year on year in the March quarter, slowing to three per cent by the June quarter.

Within this broader trend, on a monthly basis the Index predicts retail trade turnover for the month of March to be $24 billion, representing a year on year growth of 4.2 per cent for that month.

This slightly higher than expected growth for the month was likely due to the Reserve Bank’s February interest rate cut and earlier falls in petrol prices, which helped to support the stronger levels of consumer sentiment in the first few months of 2015, however, heading into May the downward trend remains, with turnover to soften to $23.9  billion and year on year growth to slow to 3.1 per cent for May.

Dr Geoffrey Annison, deputy CEO of the AFGC, said the growth in food retailing has eased a little in recent months, and is now slightly below the growth rate for total retail sales.

Phillip Austin, CHEP Asia Pacific president, said these trends indicate why there is considerable activity across all the retailers as they reconfigure their supply chains to optimise for available growth.

“CHEP’s pooling of reusable supply chain and in-store assets across industry – the original expression of the ‘sharing economy’ model – and the scale efficiencies generated from our network, will play a key role in the transformation of supply chains to meet this growth challenge at the lowest total cost to industry,” Austin said.

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 July 2015.



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