Scots retailers struggle in spite of Easter boost

The latest survey covers the five weeks to March 31, with the year-on-year comparison flattered by the fact that Easter, which provides a boost to retail sales, was earlier this year than in 2017.

SRC director David Lonsdale said: “While retail sales grew in March and at first blush seem to have turned in another creditable result, the figures were heavily distorted and flattered by the early Easter and overall last month’s performance will be seen as somewhat underwhelming.”

Food sales value in March was up by 6.8% on a year earlier, the survey shows. But non-food sales value was notably weak, down by 4% on the same month of last year.

Mr Lonsdale, touching on the impact of freezing temperatures and snow in late February and early March, said: “Grocery sales once again were the bright spot, bolstered by celebrations associated with Easter and Mother’s Day. The ‘Beast from the East’ weather phenomenon at the start of March had little impact on food sales over the trading period as a whole.

“The same cannot be said for non-food retail sales, with the ‘Beast’ preventing shoppers from reaching stores in the early part of March, and so this more discretionary part of retail spending struggled once again.”

He noted furniture sales “did well”, which is often the case at Easter”.

However, he also cited “a decline in the fortunes of other non-food categories including clothing, footwear and outdoor items”.

Mr Lonsdale meanwhile highlighted continuing pressure on household finances.

He said: “The underlying weakness in consumer spending persists and household disposable incomes face a number of headwinds, with higher council tax bills landing on doormats and with increased pension contributions for some.”

Figures published last week by the British Retail Consortium show sales value in the UK as a whole in March was up by 2.3% on the same month of last year, as Easter provided a boost. The SRC has in the past highlighted the boost to the UK-wide figures from the strength of London and the south-east.

Craig Cavin, head of retail in Scotland at accountancy firm KPMG, said of the Scottish figures: “Promotional offers were seen in some stores in the build up to Easter in an attempt to recover lost sales from earlier in the month but, whilst the Easter period boosted sales compared to recent months, March didn’t quite meet retailers’ expectations.”

He added: “It hasn’t been a positive start to the year for retailers, and it is unlikely that trading conditions will drastically improve any time soon. Retailers will need to remain agile and make themselves stand out from the crowd.”

The pressure on household finances has been underlined by the latest labour market statistics, published yesterday by the Office for National Statistics.

Although the regular average weekly earnings of households in Great Britain in the three months to February showed a real-terms, year-on-year rise for the first time since January 2017, the rise was only 0.2 per cent.

And, comparing February with the same month of last year, and including bonuses, the average weekly earnings of households in Great Britain were down by 0.2%.

Annual growth in average weekly earnings in nominal terms, including bonuses, was 2.8 per cent in the three months to February. This was unchanged from the annual rise in nominal terms in the three months to January, and was adrift of economists’ forecasts of a 3% increase.

Howard Archer, chief economic adviser to the EY ITEM Club think-tank, said: “Headline average weekly earnings growth defied expectations of a rise as it was stable at 2.8% in the three months to February.”

He noted this had resulted from annual nominal earnings growth falling back to 2.3% in February, from 2.8% in January, because of lower bonus payments.

However, Mr Archer added: “Bonus payments can be hugely erratic, with much depending on the timing of payments.”