Joint figures were released yesterday by the Australian Food and Grocery Council (AFGC) and supply chain specialists CHEP Australia and New Zealand in the AFGC CHEP Retail Index, predicting a slow steady growth in the food and grocery sector for the first quarter of 2012.
Growth is set to increase 2.1% year on year (YOY) for February and 2.2% YOY for March.
However, the AFGC noted that 2012 is set to be a highly competitive and challenging year for Australian suppliers and retailers.
Kate Carnell, chief executive of the AFGC, said that “management of the supply chain has become particularly important in light of recent operational and sales trends.”
There has been an increase in promotional sales, Carnell said, as well as more value-conscious customers, creating downward pressure on prices.
“During this highly challenging and subdued retailing environment, Australian retailers and manufacturers are focusing on planning and operational execution through the supply chain by removing inefficiencies and delays,” she said.
Tighter production, smaller costs in a volatile market
The AFGC noted that the European sovereign debt crisis is creating economic uncertainty and impacting on consumer confidence and cheaper imports as well as the rise of the Australian dollar is putting pressure on local suppliers and retailers.
The association said that consumers have responded to these volatile market conditions by employing more conservative purchasing habits, spending less or when there are promotions and shopping online or overseas.
As a result, retailers and suppliers are focussing on the pressure points within their supply chains and putting together alternative arrangements that reduce costs, Carnell said.
“By optimising the efficiency of the entire supply chain, through improved processes and practices, retailers, manufacturers and consumers all win,” she added.
The AFGC and Efficient Consumer Response Australasia (ECRA) have been working with manufacturers and retailers to improve performance outcomes through the three-year old program 'Winning' in January.