Retail growth is stalling

Figures published in the latest edition of the quarterly CHEP Retail Index, which uses transactional data from CHEP pallet movements to provide an indicator of Australian Bureau of Statistics retail trade data, have signalled minimal retail sales growth in Q2 2018.
The modest growth in pallet movements in the first few months of 2018 suggests that retailers expect the trading environment to be soft over the next few months. Retail sales growth has been moderate in the past three months, with solid growth in February following a weak result for December 2017. Yet, in annual terms, retail sales growth has been improving since a low point around September last year.
Looking ahead, the economic environment supports some further modest improvement in retail sales growth in 2018, with recent strong employment growth and a likely pickup in wage growth flowing through to higher consumer spending.
Key figures

  • 2.6% year-on-year retail turnover growth of $26b to the month of March 2018, with year-on-year figures for the month of May static at 2% consistently.
  • On a quarterly basis, 2.6% year-on-year growth for the March quarter and moving to 2.3% year-on-year for the June 2018 quarter.

Providing commentary on the index, partner at Deloitte Access Economics David Rumbens noted: “Retail sales growth remains modest, with consumers experiencing little wages growth, and confidence remaining fragile. However, a particularly weak patch for retail sales in the second half of 2017 appears to be behind us, and the stunning growth in employment that we continue to witness should lend some support to retail spending in the near term.”

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