Australia's retail sector will witness more shopping activities in the first quarter of the current year, according to the latest indicators summing up the Australian Food and Grocery Council (AFGC) CHEP Retail Index.

The new index, which was generated through transactional data assessed by Deloitte, showed that food retailers and manufacturers will get a lift during the first three months of 2012 as compared to the letdown seen last year.

Two months of successive growth in the retail industry will characterise the first two months of the year, according to AFGC chief executive Kate Carnell.

For February, the quarterly index is looking for a 2.1 percent of gain as compared to the level recorded in the same month last year.

That rise will be followed by a 2.2 percent growth in March, which Carnell said is still relatively moderate when pitted with the sales results that the sector registered during the busy months of October though early January.

Carnell added that despite the projected gains, the sector has yet to wiggle out of the slump that dominated the industry last year.

Major retail players lamented of the difficulties that plagued their operations last year, which only improved a bit when the holiday season came.

AFGC reported that retail trade spiked by 3.1 percent in the closing month of 2011 but it did little in alleviating the overall woes of the industry.

And to cope with the challenges, many industry players were forced to adopt measures that would minimise their expenditures in order to offset the weak year-on-year sales figures.

"Australian retailers and manufacturers are focusing on planning and operational execution through the supply chain by removing inefficiencies and delays," Carnell was quoted by the Australian Associated Press (AAP) as saying.

Most of the problems indentified on supply chain of retailers were brought about by the Queensland floods that wrought havoc in the first quarter of 2011, the AFGC said.

Throughout the past year, retailers complained of dwindling profits and rising costs, which were preceded by slow movement of products that in turn posed serious problems on stocks and production.

To combat the slow down, retailers were compelled to give extra attention on their supply chain to better manage and support their marketing strategies that would attract shoppers, Carnell said.

Last year's retail environment was dominated by steep price cuts and promotional ploys that retailers employed to lure back consumers who held back or altered their traditional shopping behaviour.

With focus on value and savings, many Australian consumers turned to online shopping to take advantage of the high local currency, a factor plus the prevalence of weak consumer sentiments that will continue to hound the industry, the AFGC report said.