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Scotland trailing UK as retail sales slump

THE value of retail sales in Scotland last month was down 2.5% on March 2013 — a much steeper drop than that recorded for the UK as a whole — industry figures reveal.

DOWNTURN: Non-food sales in Scotland in March were down 1.8% on the same month in 2013, figures have revealed.
DOWNTURN: Non-food sales in Scotland in March were down 1.8% on the same month in 2013, figures have revealed.

The Scottish Retail Consortium, publishing the figures today, cites the dampening impact of Easter falling in April on the year-on-year sales comparison for March. Most of the Easter weekend fell in March last year.

In the UK as a whole, the value of retail sales in March was down just 0.3% year-on-year, in spite of the Easter timing effect, according to figures published last week by the British Retail Consortium.

And the value of retail sales in Scotland has shown a year-on-year fall in three of the last four months. In February, the value of retail sales north of the Border was down 1% on the same month of last year.

In December, the SRC recorded a year-on-year drop of 1.1%, although the value of sales in January was up 4.3% on the same month of 2013.

The value of retail sales in Scotland in March last year had been up 1.8% on the same month of 2012.

And David Lonsdale, director of the SRC, was unperturbed by the sharp year-on-year fall in retail sales last month. He said the March sales figures were stronger than expected.

David McCorquodale, head of accountancy firm and SRC survey sponsor KPMG's UK retail sector practice, highlighted the continuing weakness of food sales in Scotland.

The value of food sales in Scotland in March was down 3.5% on a year earlier. Taking into account annual food price inflation in March, put at 0.8% by the BRC, the volume of food sales north of the Border was down 4.3% on the same month of last year.

In the first quarter, the value of food sales in Scotland was down 1.2% on the same period of last year.

Mr McCorquodale, who sees benefits for consumers from intensifying competition in this category, said: "Total food sales in Scotland for the three months to March fell by 1.2% compared with a decline of 0.6% in the rest of the UK, hinting that the Scottish consumer is being cautious and canny in spending on necessities, and perhaps being more alert to the discounting of the grocers.

"This is clearly a very competitive area of the market and customer loyalty will be tested to the full as the price wars launched by some grocers take effect. The winner here will be the consumer, and possibly other retail categories, should there be extra pennies to spend."

Mr McCorquodale was cautious about the outlook for spending by Scottish consumers on big-ticket items such as furniture, flooring and household goods.

He said: "The weather this year has been kinder and more spring-like, compared with the icy blasts of last year, which has meant that clothing and fashion retailers have fared better in the first quarter of 2014 compared with last year.

"More favourable economic indicators are also helping to gently loosen some purse strings. In the other non-food categories, such as furniture, flooring and household goods, we will have to wait for Easter trading to see if there is a real uptick in these categories but I fear that the Scottish consumer will wish to have harder evidence of house price rises than indicators from the south-east of England before big ticket expenditure in Scotland sees a noticeable recovery."

The SRC calculated retail sales in Scotland last month were down by a rounded 0.9% year on year in terms of volume, taking into account the BRC's overall annual UK shop-price deflation rate of 1.7% for March.

The value of non-food sales in Scotland in March was down 1.8% on the same month of 2013. However, the SRC estimated the year-on-year fall would have been about 0.2% if online sales had been included.

Mr Lonsdale, while citing a strong performance in the fashion and footwear categories last month, said: "Unsurprisingly compared to last year, categories that perform strongly over the extended Easter break have seen lower sales. Household accessories and furniture are often key purchases over the holiday, and have seen a decline."

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