Year on year growth in retail sales is at its strongest point since early 2010, according to the 12th edition of the Australian Food and Grocery Council (AFGC) Chep Retail Index.On a quarterly basis, the Index was four per cent higher in the December 2013 quarter compared with the December 2012 quarter.
AFGC CEO, Gary Dawson, said the strengthening rate of growth suggested the Christmas trading period in 2013 may have been better than analysts had expected for retailers.
The index suggests the upswing is likely to sustain through early 2014, forecasting a year on year increase of 4.2 per cent for the month of February 2014 and a 4.2 per cent year on year increase for the March 2014 quarter.
“The combined effect of low interest rates and improved consumer confidence after the Federal election has seen retailers experience a stronger than expected rise in retail sales over the past few months. Retailers will be hoping that the labour market also strengthens to support a return to a genuinely strong retail environment,” said Dawson.
Recent movements in Australian Bureau of Statistics Retail Trade trend data are consistent with this outlook. The latest data shows that year on year growth in nominal retail trade picked up to 4.1 per cent over the year to November 2013, taking economists by surprise.
Chep Australia & New Zealand President, Phillip Austin, said the strong growth since August 2013 is a welcome change.
“We’re delighted that the retail industry experienced a stronger than forecasted Christmas peak and that the uplift can be expected to continue into the March quarter of 2014,” Austin said.
The next AFGC CHEP Retail Index will be released in late April 2014. To read the Index and access more background information, visit www.afgc.org.au or www.chep.com.
