High Street in crisis as shoppers shun stores

Job cuts, wage freezes and rising household bills, particularly for fuel, have forced families to tighten their belts, causing a near 10% drop in the number of people shopping compared with last year.

Many big-name retailers have already felt the pinch, recording plunging trading figures, and experts have gloomily forecast that more pain may yet be on its way.

Figures published by the Scottish Retail Consortium today show that shops north of the Border are facing a tougher time than elsewhere, with footfall down 9% between August and October compared with 2.3% for the UK.

Like the rest of the UK around 10% of shops in Scotland also lie empty.

Ian Shearer, director of the Scottish Retail Consortium, said: “The number of people visiting Scotland’s shopping areas has nose-dived since a year ago. This is further evidence of the pressure on consumers.

“Scottish consumer confidence is also lower and falling faster than the UK average, and retail sales have performed worse than the rest of the UK for most of this year.

“Household budgets are caught between soaring utility and fuel bills and low wage growth, leaving people with less money to spend on other needs and wants.

“It’s going to take a major change to tempt shoppers out again.

“Retailers are running special events and offering early promotions, helping households with seasonal spending as Christmas gets closer.

“Beyond that the Scottish Government has to understand that retailing cannot withstand the 5.6% across-the-board inflation increase in business rates and a proposed new supermarket tax on top of that, both due in April, without knock-on effects.”

Diane Wehrle, research director at Springboard, a customer counting agency that compiled the figures with the British Retail Consortium, said the plunge in the Scottish numbers was also because the retail sector in Scotland is dominated by Edinburgh and Glasgow.

She said: “People are not coming to cities. They are not going to spend money on petrol and parking when they do not have the money to spend while they are there.”

Several major names have already taken action in a bid to tempt shoppers to return to their stores. Debenhams has launched a £200 million campaign with 40% reductions on many products while Tesco, Morrisons and Sainsbury have embarked on a price war.

John Lewis, which launched its multi-million-pound Christmas advert last week, is also finding it tough, with a 3.2% fall in trading compared with the same week as last year.

The impact of lacklustre consumer spending on companies has been brutal with last week alone seeing profit warnings from Mothercare, French Connection and Game Group.

Further poor figures are expected this week from Philip Green’s Arcadia Group, home of Top Shop, Bhs, Burton and Dorothy Perkins, with profits expected to fall by a third.

Dixons, owner of Currys and PC World, and Thomas Cook are also bracing themselves for falling sales figures this week.

Worries about job security have had a particular impact on sales of larger non-essential items such as furniture and big- ticket electrical items.

Retailers had seen 3D televisions as one possible area of strong demand this year, but so far the take-up has been lukewarm and prices have dropped sharply.

Clothing retailers in particular have complained that mild autumn weather has hurt sales of their winter lines.

There are also concerns that public-sector cuts, which have been slower to get going in Scotland will hit harder north of the Border because of its comparatively large public sector.

A Scottish Government spokeswoman said: “We are doing all we can within our current powers to boost economic security and consumer confidence in tough times -- we have implemented a ‘social wage’, and a no-compulsory redundancy policy for staff under our control.

“Measures such as the council tax freeze, free prescriptions and no tuition fees are helping promote consumption in Scotland by protecting household budgets at a time of rising inflation and fuel prices.”