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Retail sales on the rise

bags, shoppingYear on year retail sales are expected to improve slightly in the coming months, but food sales growth still remains lower than other sectors, according to the eighteenth edition of the Australian Food and Grocery Council (AFGC) CHEP Retail Index.

The Index was 4.2 per cent higher in June 2015 compared with June 2014. On a quarterly basis, the Index was 4.3 per cent higher in the June quarter 2015 compared with the year before.

“Looking ahead to the month of August 2015, there’s a continuation of the recent trend of improving retail sales growth, with year on year growth reaching 4.7 per cent,” said Phillip Austin, CHEP Asia Pacific President.

“Growth in the Index is expected to lift to 4.6 per cent year-on-year by the September quarter 2015.”

The latest Australian Bureau of Statistics trend data indicates that household goods retailing continues to be the strongest performing retail sector, most likely on the back of low interest rates and a strong lift in new home building.

The low interest rates also appear to be supporting some other discretionary categories, including clothing sales which have strengthened since March 2015, however, food retailers have experienced a lower growth rate of around four per cent since late 2014.

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By state, retail sales growth above the national average is being seen in NSW, Victoria, South Australia and the ACT.

In contrast, retail sales growth in the mining jurisdictions of Western Australia, Queensland and the NT continues to be below the national average, however, there have been some signs of improvement in WA and Queensland since the end of last year, with the rate of retail sales growth lifting slightly in recent months.

Australian Food and Grocery Council CEO, Gary Dawson, said, “It’s encouraging to see low interest rates and a pickup in jobs growth rate flowing through to stronger retail sales. In food retailing, growth is lower than other retail sectors, but at four per cent or better, remains strong despite softening population growth, and is likely to continue to benefit from improved confidence and ongoing low interest rates.”

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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.

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