Index points to better times ahead for retailers, with online still shining

Better times are tipped for retailers, with trade activity in the June quarter expected to grow, and online sales in particular forecast to continue their impressive growth.

The Australian Food & Grocery Council/CHEP Retail index, which tracks retail activity by looking at pallet movements, tips retail activity to grow by 3.1% in the June quarter from the previous comparable period. This is a slight increase from the 2.7% growth recorded in the March quarter. The index is brand new, although it is based on years of customer records.

The index is the work of lobby group the Australian Food & Grocery Council and CHEP, the pallet hire business of Brambles, and accounting giant Deloitte.

CHEP and the AFGC say the data suggests retailers expect “consumers to start loosening the purse strings, with supply of goods on the rise to meet anticipated demand”.

CHEP Australia general manager Phillip Austin has told the Australian Financial Review that activity in one part of the supply chain leads to activity in the next part of the supply chain, which eventually leads to activity in retail trade a month or three down the track.

And if past is any guide to the future, online sales stand to benefit. A study by internet marketing analyst Experian has found that the number of visits by Australian shoppers to sites offering a single product has soared 1,000% in the year to May 21, with time spent on the sites also increasing.

This follows a separate Bain & Company survey of more than 1,000 Australian consumers which tipped online spending to dramatically increase this year.

Morgan Stanley has previously tipped that online sales nationwide would increase to nearly $30 billion by 2015.

But BRW Rich lister Frank Lowy, however, is upbeat about the prospect for the Australian economy generally and shopping centres specifically.

Yeserday Lowy told his final annual general meeting as executive chairman of Westfield Group yesterday that there is “more reason than ever to believe that the broad economic outlook is more positive than it has been for some time.”

Taking a medium- to long-term view, Lowy said “the fundamentals of the Australian economy are strong, and this will underpin the growth of the shopping centres into the foreseeable future.”