Grocery spending expected to continue slowing well into 2015

The AFGC CHEP Retail Index, which is compiled by Deloitte using transactional data based on pallet movements logged by container company CHEP, and is a lead indicator of Australian Bureau of Statistics retail trade data. It had been showing evidence of a slowing in the rate of growth in the second-half of 2014.

The Deloitte index registered at 4.4% higher in the December quarter than the same period in 2013; however, retail sales growth is now expected to slow down, with the March quarter results showing just 2.4% year-on-year growth.

Christmas trading saw an increase in retail sales of 4.5% year on year, with turnover of A$23.75bn (US$18.87bn). However, growth in February 2015 is less robust at 2.5% year on year, with turnover retracting to $23.6bn between December and February.

Gary Dawson, chief executive of the Australian Food & Grocery Council, said: “The lower Australian dollar is positive news for Australian food and grocery exporters; however, the domestic market remains tough for manufacturers, given below average consumer sentiment and the highest unemployment rate in more than a decade​. 

“Manufacturers and retailers will be hoping the fall in oil prices and low interest rates are sustained, leading to improved consumer confidence in 2015​.”

CHEP’s Asia-Pacific president, Phillip Austin believes the new figures indicate sizeable challenges for retailers that can only be overcome if they take an “innovative approach” to the supply chain by improving the way products move through the supply chain to the end consumer.