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Pallets point to retail slowdown

An index based on pallet movements points to slowing growth in retail trade.

The Australian Food and Grocery Council CHEP Retail Index, constructed by Deloitte, is derived from CHEP’s transactional data.

It’s designed to be an advance indicator of the retail trade figures published by the Australian Bureau of Statistics.

President of CHEP Asia Pacific, Phillip Austin, says experience has shown the index to be “a very accurate lead indicator of retail sales growth”.

“The insights provided by this forecast should help customers prepare for and manage their supply chains more efficiently throughout this period,” he said.

The AFGC says the index suggests annual growth in retail sales will slow over the remainder of 2016, even from the anaemic trend growth rate of 2.6 per cent reported by the bureau for the year to August.

In August last year the growth rate was 3.9 per cent, while a year before that it was more than twice the current pace at 5.8 per cent.

“The larger-than-expected fall in retail sales growth reflects a number of factors such as moderating jobs growth and record low wages growth, a long-term deflation in food and grocery retail prices domestically and increasing input costs,” AFGC chief executive Gary Dawson said.

“This all adds up to the outlook, while still one of growth, being less robust than the food and grocery sector would like to see especially heading into the December quarter holiday period.”

The ABS will update the retail trade figures with September data on November 4.

This article first appeared on our sister site, Inside Retail Australia

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