The latest edition of the quarterly AFGC CHEP Retail Index has signalled modest retail sales growth in Q1 2018.
The index, which uses transactional data from CHEP pallet movements to provide a lead indicator of Australian Bureau of Statistics retail trade data, saw an early-2018 moderation in pallet movements that suggests retailers expect a modest trading environment over the initial months of 2018.
According to the index, retail sales did show some strength in late 2017, but not enough to offset the soft growth in average retail spending over the rest of the year. Online retail continued to grow its share of the overall retail market during 2017.
Looking forward, the economic environment is supportive of potential improvement in retail sales growth in 2018 when improved business confidence, investment and labour market outcomes flow through to consumer spending.
“Shaky retail sales growth during most of 2017 reflected fragile consumer confidence, continuing underemployment and a lack of wage growth. However, the improvement in retail sales growth towards the end of the year was some reward for retailers linked to the stunning rate of jobs growth which has also been seen through 2017,” Deloitte Access Economics partner David Rumbens said.
AFGC CEO Tanya Barden, said: “After a tough trading year, the boost in late 2017 trade and continued improvements in the economy are good signs. While the AFGC CHEP index has not predicted an immediate uplift in spending in early 2018, we are hopeful of more sustained growth as 2018 progresses.”
