After a slow start, retail will strengthen in the second half of this year, according to the quarterly Chep Retail Index.
Retailers remain confident about the next quarter―improved wage growth and income tax cuts will allow for an increase in household spending power.
While retailers continue to face difficult conditions in 2018, there is light at the end of the tunnel says David Rumbens, partner at Deloitte Access Economics.
“We do expect wage growth to edge higher through the year as the labour market tightens a little, and stronger wages will be good news for retail spending, driving a modest but broad-based pick-up in spending power across the workforce.”
This year saw a 2.9 per cent year-on-year turnover growth of $26 billion to the month of June, with year-on-year figures for the month of August increasing to 3.9 per cent.
The onslaught of international entrants to our shores combined with the rise in online retailing gives consumers a lot more choice than they have had before. This is especially the case for the fashion and homewares sectors, where strong volume growth is coupled with falling prices as retailers compete with market share.
“We’ll continue to collaborate with our retail customers to support their physical and online markets, and to continue to identify and drive efficiencies in the supply chain to offset modest growth and support our long term growth strategy,” country general manager of Chep Australia, Todd Montgomerie, adds.
By Marion Gerritsen