TOTAL retail sales continued to fall in Scotland last month – in spite of food recording its best sales performance since July 2013.
But industry chiefs insisted the slowing rate of sales decline offered grounds for optimism after months of negative growth.
Total retail sales dropped by 0.6 per cent in Scotland in September, according to the latest Scottish Retail Sales Monitor, signalling that the rate of sales decline has slowed following falls of 2.2 per cent in August, and 1.8 per cent in July.
The Scottish Retail Consortium (SRC) said the figures allow the sector to be “cautiously optimistic”, noting that, adjusting for price deflation of 1.8 per cent, sales had risen by 1.1 per cent in real terms.
However the figures highlight that the performance of retailers north of the Border continues to lag the wider UK industry. The British Retail Consortium (BRC) reported that total retail sales rose by 1.3 per cent in September, having fallen by 0.3 per cent in August and increased by 1.9 per cent in July.
On a like-for-like basis, which strips out the effect of new store openings and closures, the SRC said the growth of sales decline also slowed in September, to 0.4 per cent. Like-for-like sales had dropped by 1.9 per cent in August and 1.7 per cent in July.
The SRC noted that food had been the standout performer for Scottish retailers in September, with total sales rising by 0.7 per cent after two consecutive months of negative growth.
The consortium said that, adjusting for price deflation of 1.3 per cent, as measured by the BRC Nielsen Shop Price Index, food sales increased by 1.9 per cent in real terms in September, its best result since July 2013.
Paul Martin, UK head of retail at survey sponsor KPMG, highlighted the “significant role” played by the “unseasonably warm September” in driving food sales last month, stating that the clement conditions had offered consumers a “last chance to eat al fresco before the cold weather set in.” He said the ongoing price war between grocers may have helped to drive sales.
However, while food sales were boosted by the warm weather, sales of autumn and winter clothing ranges suffered. Total non-food sales slipped by 1.7 per cent in September, continuing a sequence of negative growth which stretches back to September 2015.
Ewan MacDonald-Russell, head of policy and external affairs at the SRC, said September had been “the first decent month we have had for ages”, while acknowledging the “storm coming down the road is huge” in terms of Brexit and rising import costs following collapse in sterling.
“There does seem to have been a bump in retail sales,” he said. “Clothing is a bit down, but that’s because people didn’t buy their winter coats in September. It’s one of those arbitrary things.”
He added: “This is quite strong, but I wouldn’t dare to say anything like green shoots at this stage. It is too early.”
Official figures showed that consumer price inflation had jumped to a higher than expected one per cent in September, rising from 0.6 per cent in August.
The Office for National Statistics said there was “no explicit evidence” that sterling’s near 20 per cent slump since the Brexit vote had impacted prices. However it was a factor in the recent Marmitegate pricing row between Tesco and Unilever.
Mr MacDonald-Russell said it “really hard to see how retailers will not be affected” by the fall in sterling given the scale of the goods they import.
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