(Australia-NewsWire.Com, November 12, 2012 ) Victoria, Australia -- As weak consumer confidence continues into the festive season, Christmas time spending is expected to decrease, according to a retail index.
A year-on-year growth of 2.9% for the December quarter is expected by the Australian Food and Grocery Council (AFGC) and pallet and packaging company CHEP, which is well below the 10-year average, which sits at 5%.
The year-on-year growth for the September quarter is also softer at 3.7%.
On top of that, the AFGC CHEP Retail Index is expecting a decrease in retail turnover from $21.56 billion in September to $21.52 billion in November.
Gary Dawson, AFGC chief executive, said that consumer sentiment was still being adversely affected by broader economic conditions even though the Reserve Bank's interest rate cuts have helped the retail sector.
The decision of The Reserve Bank to cut interest rates over the last six months has helped raise retail trade conditions. However, Dawson said the broader economic backdrop has created a soft retail environment heading into Christmas: “We're hoping that another cut in interest rates will send the right signals to households so they embrace this summer season with more optimism.”
Dawson also claims that food manufacturers were being hit by the rise in costs for commodities, labor and energy, margins were being cut by retail price deflation.
Phillip Austin, president of CHEP Australia and New Zealand said that while the anticipated growth over Christmas was modest, it was rather encouraging to retailers.
“Further, the prospect of improved summer conditions may offer stronger growth prospects in traditional seasonal categories,” said Austin.
Chief executive of Australian National Retailers Association, Margy Osmond, has previously said that she expects Christmas spending to be up from 2011..
Osmond said that while she expects growth to be modest, local retailers have faith due to the fact that consumers had been saving during the year. This could mean increase spending during Christmas.
About HouseOfChristmas.com.au:
HouseOfChristmas.com.au (http://houseofchristmasgifts.com.au) has everything people need for Christmas decor. From trees, to lights, to ornaments, The House of Christmas Gifts will make homes sparkle with its beautiful selection of affordable gifts.