The most recent edition of the Australian Food and Grocery Council (AFGC) CHEP Retail Index has shown signs of modest recovery in retail turnover growth, with food retail spending performing particularly well.

In a release, the AFGC said this followed a sustained period of softening growth over 18 months that reflected uncertainty in Australian and global economies. 

The index uses transactional data from CHEP (a subsidiary of Brambles Ltd, which also owns IFCO) to provide a lead indicator of Australian Bureau of Statistics (ABS) retail trade data.

The index predicts year-on-year growth in Australian retail turnover of 4.6% for the month of June 2017 and 3.6% year-on-year for the June quarter. This is up from a year-on-year rise of 2.6% in March, 2017.

The AFGC said this trend was projected to continue with year-on-year growth figures for the months of August at 4.2% and September at 4.1%.

Despite a persistent degree of consumer caution and a competitive retail environment, Australia’s economic outlook over the coming 12 months is characterized by modest improvement,  boosted by factors such as a lift in global trade, China’s demand for commodities, inbound tourism as a result of strong economic growth in Asia, and growth in Australian household wealth.

"After a period of relatively subdued retail trade, it is encouraging to see signs of some positive momentum," AFGC CEO Tanya Barden said in the release.

"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. 

"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 continued 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," he said.

"This may accelerate as firms look to capitalize on the stronger momentum forecast by the Index."

The announcement follows a recent claim from Coles managing director John Durkan that rising living costs and low wage growth meant shoppers were swapping healthy foods for cheaper packaged goods, as reported by Inside Retail.

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