Retail sales are showing signs of a recovery following 18 months of easing sales growth, according to latest figures from Australia’s peak food and grocery body.

Sales revenue across the country’s retail sector grew 4.6 per cent to $26.4 billion during June compared to a year ago, a retail index produced by the Australian Food and Grocery Council (AFGC) and pallets business CHEP shows.

This follows 18 months of softening growth, including a 2.6 per cent rise to $25.7 billion in March.

The AFGC-CHEP Retail Index is up 3.6 per cent for the June quarter compared to a year ago – stronger than the 2.8 per cent increase during the March quarter.

It also shows the recovery is expected to continue, with sales turnover forecast to rise 4.2 per cent in August and 4.1 per cent during the September quarter.

According to the index, despite a persistent degree of consumer caution and a competitive retail environment, Australia’s economic outlook over the coming 12 months is characterised by modest improvement, being 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.

AFGC chief executive Tanya Barden says the index shows the retail sector is set for a modest recovery and is a good indicator of what to expect on Friday when the country’s official retail trade figures are released.

“After a period of relatively subdued retail trade, it is encouraging to see signs of some positive momentum,” she said.

“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.”

President of CHEP Asia Pacific, Phillip Austin said the reliability and efficiency of supply chains “continues 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. This may accelerate as firms look to capitalise on the stronger momentum forecast by the Index,” he said.

The AFGC-CHEP index uses data from CHEP pallet movements and is produced by consultancy Deloitte.

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