By Aimee Chanthadavong

While last week hinted that retail will begin to pick up as we move into the New Year, the 11th edition of the Australian Food Grocery Council (AFGC) CHEP Retail Index suggests otherwise.

This Index shows year-on-year growth in retail sales is slowing and a turnaround is not expected in the remaining months of this year indicating retailers will face another challenging Christmas.

On a quarterly basis, year-on-year, the Index was 1.8 per cent higher in the September quarter than in the same period last year and growth is expected to further ease to 1.5 per cent in the December quarter 2013.

For the month of September the AFGC CHEP Retail Index predicts the Australian Bureau of Statistics (ABS) is likely to report 1.9 per cent increase in year-on-year retail growth and turnover of $21.89 billion. Looking ahead, the Index forecasts November year-on-year growth at 1.5 per cent, with turnover dropping to $21.85 billion.

“Retail sales growth is certainly underperforming against longer term trends, with the growth rate halving over the course of 2013,” Australian Food & Grocery Council (AFGC) CEO, Gary Dawson, said.

“Food retailers are performing best with sales growth of around 3 per cent over the past year. Retailers will be hoping the recent improvement in consumer confidence will assist sales growth this Christmas.”

As the mining boom slows, retail performance is tightening, with ABS retail data showing sales growth in Western Australia has slowed from 10 per cent to below 2 per cent in the past year. In other states it has ranged between 1 and 3 per cent over the past year.

“The AFGC CHEP Retail Index forecasts highlight the criticality of effective and efficient supply chains in maximising on shelf availability and promotion in the peak Christmas period, and we will be focusing our efforts on helping retailers have product where they need it, when they need it over what is traditionally the busiest retail period of the year,” CHEP Australia & New Zealand president Phillip Austin said.