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CHEP Retail Index shows improvement

The industry has its fingers crossed for Australian retail, which is exhibiting signs of “modest recovery” according to the latest CHEP Retail Index report.

The latest period of retail turnover growth follows a sustained, 18-month period of softening growth, which reflected uncertainty in Australia and economies abroad.

The Edition 26 report for 2017 stated that year-on-year retail index growth for August 2017 is expected to climb to 4.2%, for a year-on-year growth through to the September quarter of 4.1%.

The report also recognised that average wealth per household in Australia had grown to $1 million in the early months of the year, attributed to house price growth (except in Perth and Darwin).

“Improved wealth will only translate into higher retail spending if consumers become less cautious about the risks of their investments,” the report said.

“Many consumers are aware of the risks of the housing market and are adjusting their spending habits accordingly.

“Aside from the risks of a downturn in house prices, housing affordability considerations are putting a strain on spending for both mortgage-holders and prospective buyers.”

Australian Food and Grocery Council CEO Tanya Barden said it was encouraging to see signs of positive momentum after a “relatively subdued” period of trade.

“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,” she said.

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

CHEP Asia Pacific president Phillip Austin said: “The reliability and efficiency of the supply chain continues to be a major factor in the success of Australia’s retail sector.”

“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.”

The AFGC CHEP Retail Index is a collaborative project between the Australian Food and Grocery Council and CHEP Australia, produced by Deloitte.

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