November’s survey offers little hope for Scots retailers.

THE value of Scottish retail sales in November was down 1.2% on a year earlier, an industry survey reveals today, highlighting grim high street conditions ahead of the key festive trading period.

Loading article content

The survey, from the Scottish Retail Consortium (SRC), also signals the sector remains significantly weaker north of the Border than in other parts of the UK.
The November figures for Scotland are even more disappointing given that the value of retail sales north of the Border in November last year was down 1.3% on the same month of 2010.

SRC director Fiona Moriarty said: “These underwhelming figures, which scarcely improve on October, mark the closing stages of what has been a challenging year for retailers in Scotland.”

A recent survey for the European Commission, by pollster GfK NOP, showed a rise in UK consumer confidence in November, from extremely low levels.

Ms Moriarty said: “Consumer confidence is stronger, but this has yet to kick-start sales growth. People are waiting for attractive promotions and discounts before they make a purchase and holding back on spending too much too soon, so that they can be sure of covering the cost of Christmas.”

The Scottish sales figures were, again, much worse than those for the UK as a whole published by the British Retail Consortium.

In October, the value of Scottish retail sales was down 1.3% on a year earlier. According to the BRC, there were respective 1.1% and 1.8% year-on-year rises in the value of UK retail sales in October and November.

The SRC has cited a belief that public sector job cuts may be having a greater impact on spending in Scotland than in some other parts of the UK. It has noted that public sector jobs constitute a greater proportion of total employment in Scotland than in other parts of the UK.

Non-food sales, which reflect more discretionary purchases, showed another sharp year-on-year fall in the latest Scottish figures. The value of non-food sales in November was down 4.7% on the same month of 2011, matching the year-on-year fall in October.

The SRC cited the impact of cold and wet weather on sales of clothing and footwear, which were particularly weak last month.

The value of food sales in Scotland in November was up 2.6% on the same month of last year. But the SRC noted, taking into account food price inflation put at 4.6% by the BRC, this equated to a 2% fall in food sales in real terms.

David McCorquodale, head of accountancy firm KPMG’s UK retail practice, said: “There is little festive cheer in the November figures this year.”

Declaring that Chancellor George Osborne’s Autumn Statement last week had “warned of little growth in the year ahead”, Mr McCorquodale added: “It will take a while for consumers to feel secure enough to open their wallets and spend again. Rather than spread the cost of Christmas, it appears the consumer is waiting for last-minute promotions before committing to buy. The danger is that many may simply choose to reduce the number of presents they give this Christmas rather than incur further expense.”

He added: “For retailers, the next two weeks are critical for margins and cash flows and they will not want to be left at the end of the year holding unwanted stock. To discount, or not to discount before Christmas, is the real question.”

Ms Moriarty saw signs of a shift in public mood in recent reports from some retailers of increased sales. She added: “With Christmas falling on a Tuesday, many [consumers] may sense that having a full shopping weekend two days before Christmas gives them more time to round off their buying.”