Modest trading is the outlook for Christmas trading this year, with the AFGC CHEP Retail Index predicting year-on-year growth of 2.9 per cent for the December quarter.

This prediction is below the 10-year average of 5 per cent and softer than year-on-year growth in the September quarter of 3.7 per cent.
While retail trade turnover will experience a slight contraction in from $21.56 billion in September to $21.52 billion in November, lower interest rates may help to provide support to retail spending.

The Reserve Bank’s decision to cut interest rates over the last six months has helped boost retail trade conditions, but overall the broader economic backdrop is creating a soft retail environment heading into Christmas,” Australian Food & Grocery Council CEO Gary Dawson said.

“We’re hoping that another cut in interest rates will send the right signals to households so they embrace this summer season with more optimism.

“Food manufacturers are facing an environment where sluggish retail conditions, rising input costs on everything from commodities to labour to energy and retail price deflation continues to cut margins, placing the sector under increasing pressure.

“Despite the challenges, the food and grocery manufacturing sector is still optimistic that it is well-positioned to improve its competitiveness through seeking efficiencies across the entire supply chain by improving processes and practices, and increasing investment in research and development and innovation.”