By Ian McConnell

Business Editor

SCOTTISH retail sales showed another sharp year-on-year fall in September, with no sign of the high street misery induced by the coronavirus pandemic lifting as the key festive trading period looms.

The Scottish Retail Consortium’s latest monthly monitor shows the value of sales north of the Border last month was down by six per cent on September 2019.

Although this was not as bad as the 7.5% year-on-year fall in August, the SRC warned the latest figures, published today, show Scotland’s retail sector is “nowhere near returning to growth”.

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The value of non-food sales, which tend to reflect the more discretionary elements of retail spending, was in September down by 14.2% on the same month of last year. Food sales value was up by 3.7% year-on-year. This was an improvement on a 1.5% year-on-year rise in food sales value in August.

Ewan MacDonald-Russell, head of policy and external affairs at the SRC, noted Scottish retail sales had shown a year-on-year decline for eight consecutive months and described this as a “huge concern to the industry ahead of the crucial Christmas trading period”.

He added: “Another month of disappointing sales confirms Scottish retail is nowhere near returning to growth.”

Adjusting for shop-price deflation, Scottish retail sales volumes in September were down by 4.4% on the same month of last year.

Paul Martin, UK head of retail at survey sponsor and accountancy firm KPMG, highlighted weakness in consumer confidence amid fears of stricter lockdown rules aimed at combating the spread of coronavirus and worries over a no-deal departure from the European single market.

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Noting the deceleration in the year-on-year decline in retail sales value in September, Mr Martin said: “Whilst September’s figures paint a slightly less bleak picture for Scotland’s high streets, the challenges facing retailers show little signs of abating. Total year-on-year sales were down 6%, which is a modest improvement from August’s 7.5% drop. However, with the resurgence of stricter lockdown rules and the prospect of a no-deal Brexit, consumer confidence remains low.”

Analysing the mix of Scottish retail sales in September, Mr MacDonald-Russell said: “Food sales returned to more buoyant growth, correlating with the end of the Eat Out to Help Out scheme. Whilst positive for grocers, there was little evidence of customers stockpiling over the month – instead it appears to be a shift from discretionary to essential spending.”

He added: “Non-food sales continue to diverge sharply by category. White goods, household essentials, and electronics continue to perform well, with televisions and gaming boosted by new releases. Conversely, fashion, footwear, and beauty products continue to perform poorly with customers only buying necessary rather than indulgent products. There is also some evidence consumers are already turning to Christmas shopping – presumably to avoid queuing outdoors in the depths of the Scottish winter.”

He highlighted huge pressures for retailers as they entered the key festive trading period.

Mr MacDonald-Russell said: “Overall, the Scottish retail industry is in fragile condition heading into the golden trading quarter. There are severe headwinds ahead. Whilst shops can continue to trade, the lockdown of hospitality businesses removes reasons to visit town and city centres. The costs of operating safely continue to skyrocket – few retailers can operate profitably under these conditions.”

Mr Martin said: “It’s clear consumer expenditure has continued to shift away from non-retailing categories like travel and leisure, whilst the focus remains on food, furniture and electronic goods. Elsewhere, non-food, and fashion and footwear retailers suffered a month of woeful performance, with demand seen only for children’s clothing, in a period in which outfits for seasonal events should usually have been purchased.”