Chep Retail Index shows modest gains in the offing

China and national economy seen putting some wind beneath sector’s wings

Chep Retail Index shows modest gains in the offing
Chep’s report sees retail upside


Transport and logistics operations exposed to the retail sector have received some good news in the latest AFGC CHEP Retail Index.

Such companies can expect more business in the coming months, as the Index, a collaborative project between the Australian Food and Grocery Council (AFGC) and CHEP Australia, produced by Deloitte, indicates strengthening retail spending.

It predicts year-on-year growth in Australian retail turnover of 4.6 per cent for the month of June 2017 and 3.6 per cent year-on-year for the June quarter – which is up from a year-on-year rise of 2.6 per cent to March 2017.

According to the report, this is projected to continue with year-on-year growth figures for the months of August at 4.2 per cent and September at 4.1 per cent respectively.

 "After a period of relatively subdued retail trade, it is encouraging to see signs of some positive momentum," AFGC CEO Tanya Barden says.

"We have seen food retail spending, in particular, pick up and fill some gaps from weaker non-food retailing, with catered food driving most recent improvements.

"Household goods have been the best performer for non-food retailing."

Chep, a Brambles subsidiary, highlights the sector’s support services as crucial to it sustaining the run.

"The reliability and efficiency of the supply chain continues to be a major factor in the success of Australia’s retail sector," Chep Asia Pacific president Phillip Austin.

"Retail supply chains are already evolving to be more effective and sustainable in the face of increasing competition, emerging technologies and ever changing consumer needs.

"This may accelerate as firms look to capitalise on the stronger momentum forecast by the Index."

China and domestic economic recovery along with local employment growth were seen as supporting the positive trend.

Of the categories, the Index reports food retail spending picking up, filling part of the gap left by weakened growth in non-food retailing.

Catered food has been driving the recent improvement within the broader food categories, while household goods has been the best performer for non-food retailing.

Competitive risks, specifically growth of international and online retailing, are expected to impact most retail categories.

"The economic outlook for the next 12 months is characterised by modest improvement," the report concludes.

"As labour market indicators and wealth continue to improve, retail spending is expected to rise with them, after the recent period of relatively weak growth."

You can also follow our updates by joining our LinkedIn group or liking us on Facebook