Food growth leading the way in retail sales

While consumer confidence remains shaky and retail growth is lacklustre, food is in a better position than other retail sectors, according to the latest AFGC CHEP Retail Index.

The Index is a collaborative project between the Australian Food and Grocery Council and CHEP Australia, using CHEP's transactional data based on pallet movements to predict performance in the retail market.

The Index reports that the rate of growth in retail trade decreased marginally in the first three months of 2013, and is expected to ease further as the year continues. It also showed three percent growth in the March quarter year-on-year, but forecasts growth will ease to 2.6 percent in the June quarter.

In March, the Index indicates that the Australian Bureau of Statistics (ABS) will report year-on-year growth of 2.6 percent, with turnover of $21.7 billion. May retail trade growth is predicted to be 2.8 percent year-on-year, with turnover increasing to $21.9 billion.

Australian Food & Grocery Council (AFCG) CEO, Gary Dawson, said "Retail conditions have been soft through the beginning of 2013, and the Index confirms that consumer confidence remains fragile, with low interest rates yet to bring a sustained lift in the retail sector."

The findings are a little more promising for food, with recent ABS statistics showing food and grocery retail has a more solid rate of year-on-year growth than overall retail sales growth.

Food retail growth was 4.6 percent in February 2013, with spending on cafés, restaurants and takeaway food seeing a similarly solid growth rate. By contrast, department stores experienced year-on-year sales growth below one percent in February, as growth in online sales and ongoing price deflation make their mark in non-food retailing.