THE value of Scottish retail sales in the key trading month of December was down 1.1% on a year earlier, a significantly weaker showing than that in the UK as a whole, industry figures have revealed.
This "setback" for the retail sector north of the Border is revealed in the Scottish Retail Consortium's latest monthly survey, published today.
The year-on-year movement in Scottish retail sales value in December was the worst since November 2012, excluding distortions last April relating to the timing of Easter.
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In November, the value of Scottish retail sales had been up 1.6% on the same month of 2012.
According to figures published last week by the British Retail Consortium, the value of UK retail sales in December was up 1.8% on the same month of 2012.
The year-on-year movement in UK retail sales value last month was the weakest since December 2012, excluding Easter-related distortions. Nevertheless, the SRC and BRC surveys together signal that festive trading for retailers was much tougher in Scotland than in the UK as a whole.
The SRC said its December sales figures showed a "small setback".
David McCorquodale, head of SRC survey sponsor and accountancy firm KPMG's UK retail sector practice, said: "Despite a stronger summer, these Christmas figures are a stark reminder that, while things may feel better in confidence terms, consumers spend cash and not confidence. Better days will only hit the high street when wage rate inflation takes off."
UK households have had to endure a lengthy period of falling incomes, in inflation-adjusted terms.
Food sales in Scotland were weak in December, according to the SRC. The value of food sales last month was down 0.3% on December 2012. This contrasted with a 2.3% year-on-year rise in November. Taking into account annual food price inflation in December, put at 1.7% by the BRC, food sales in Scotland last month were down 2% year-on-year in volume terms.
The value of non-food sales in Scotland in December was down 1.7% on the same month of 2012.
This marked a significant deterioration from the 1.1% year-on-year rise in the value of non-food sales in November.
The BRC has calculated prices in the non-food category in December were 2.3% lower than in the same month of 2012. This implies a year-on-year rise of about 0.6% in the volume of non-food sales in Scotland last month.
Citing overall annual shop-price deflation of 0.8%, on the basis of the BRC figures, the SRC noted that the 1.1% year-on-year fall in the value of Scottish retail sales in December indicated that volumes last month were down 0.3% on a year earlier.
In spite of the overall weakness of Scottish retail sales in December, the SRC cited strength in the clothing and footwear category. However, it indicated weakness in sales of furniture and flooring, noting evidence from a survey by pollster GfK NOP, on behalf of the European Commission, that consumers were less confident last month about making major purchases.
Mr McCorquodale meanwhile cited signs of pressure on profit margins in clothing and footwear, amid heavy discounting.
SRC director David Lonsdale said: "The overall trend for sales in 2013 was generally positive. However, these figures show a small setback in December, which will be disappointing news for Scottish stores but will hopefully prove short-lived."
He added: "There are some categories where the news has been better than others. Clothing and footwear had a strong month, for example...There is also some evidence that convenience-store formats have done well.
"However, in other categories, Scottish sales performance was weaker than in the rest of the UK. As our figures showed earlier this week, Scotland's shops saw fewer people visiting them in December, which won't have helped. The general fragility of the economic recovery, and evidence of an increase in online shopping may also have had some part to play."
Mr McCorquodale said: "On the face of it, the Scottish sales ended a year of recovery on a negative note. A combination of an extremely competitive market in the food and drink sector, and gales in the days before and after Christmas dampened an otherwise positive year.
"The best-performing category was fashion and footwear but the evidence suggests this volume was driven by significant discounting, so retailers will be counting the cost in margin terms once they've added all the numbers up."