North-south confidence gap cited as Scottish retail sales fall again

This continues a pattern of significantly weaker year-on-year movements in retail sales value in Scotland than in the UK as a whole.

David Martin, head of policy and external affairs at the SRC, noted that the latest GfK survey had shown a tumble in consumer confidence in Scotland in June. This contrasted with a sharp rise in consumer confidence in the UK as a whole, with Mr Martin noting a “significant gap in confidence north and south”.

Mr Martin observed that, while Scottish consumer confidence had exceeded the UK average “for the first time in a very long time” in May, it had generally been lower than in the likes of south-east England in recent years.

Asked about the reasons for weaker consumer confidence in Scotland, Mr Martin said: “[One] aspect is the resilience of the economy in the south-east and around London,and the impact that has on the UK-wide average, compared with the resilience of the Scottish economy.

“Consumer confidence has been more buoyant historically, for quite a few years now, there [in London and south-east England]. It was slightly more impervious to the impact of the recession we have come through.”

Asked if there were any signs that the public spending cuts were having more of an impact in Scotland than elsewhere in the UK from a consumer confidence perspective, Mr Martin replied: “There is certainly an argument that a greater percentage of the Scottish economy is in the public sector than [is the case] in the south.

“That will have an impact on consumer confidence and confidence to spend, if there is a higher degree of uncertainty about your job and your income and everything else, and the squeeze that is going on. That is certainly a factor, I would say.”

Mr Martin also cited the dampening impact of poorer summer weather in Scotland than in the south of England on the retail sector north of the Border.

He said: “Certainly the south of England has had a slightly better summer than we have had in Scotland.”

More generally, Mr Martin cited a desire by households to reduce their debt levels, and also, in the wake of the recession, to spend money again, or more often, on the likes of dining out or holidays. He highlighted the impact of such decisions on the retail sector.

The latest Scottish sales figures come hard on the heels of a survey published on Monday by the SRC and retail intelligence provider Springboard, showing that shopper footfall north of the Border in the June trading period was down by 2.4 per cent on a year earlier.

The year-on-year fall in Scottish retail sales value in June was not as steep as a corresponding decline of 3.1 per cent in May.

However, the year-on-year fall in June occurred against a weak comparative figure. Scottish retail sales value in June last year had been down 1.1 per cent on the same month of 2013.

Sales of food in Scotland were particularly weak in the latest June trading period.

Adjusting for annual shop-price deflation, as measured by the BRC and market researcher Nielsen, the SRC noted that the volume as opposed to value of Scottish retail sales in June was down by 0.4 per cent.

David McCorquodale, head of accountancy firm and SRC survey sponsor KPMG’s UK retail sector practice, noted that grocery sales continued to decline at a faster year-on-year pace in Scotland than elsewhere in the UK.

Food sales value in Scotland in June was down by 2.2 per cent on the same month of last year. The value of non-food sales north of the Border in June was down 1.3 per cent year-on-year, although the SRC noted this did not take into account a positive impact from online sales.

The SRC cited a boost to sales of spring and summer fashion ranges from “briefly warmer weather” at the end of June.