By Ian McConnell
Business Editor
THE year-on-year rate of decline in Scottish retail sales value accelerated again in October, amid a tightening of coronavirus-related restrictions and major economic uncertainty, the latest industry figures reveal.
Brexit was cited as another factor weighing on consumers.
The data highlight the pressure on the retail sector in Scotland even before yesterday’s news of the impending closure of non-essential shops in 11 local authority areas with a move to tier-four restrictions in these parts of west and central Scotland from 6pm on Friday to slow the spread of coronavirus.
Restrictions in Scotland have been tightened significantly again over recent months amid a resurgence of Covid-19 throughout the UK and elsewhere.
The Scottish Retail Consortium’s latest monthly figures, published today, show the value of retail sales north of the Border in October was down by 8.5 per cent on the same month of last year.
READ MORE: Ian McConnell on Brexit: Stupefying Tory arithmetic and the true, sorry story
This followed five consecutive months in which the year-on-year decline in Scottish retail sales value had decelerated. The year-on-year fall in sales had slowed from 40.3% in April, at the height of lockdown, to 6% by September.
Flagging the renewed acceleration in the year-on-year decline in Scottish retail sales value in October, SRC director David Lonsdale said: “The recent gradual improvement in retail sales went into reverse in October, slipping to the weakest performance since the ending of the lockdown in June, as greater Covid restrictions and economic uncertainty exerted a vice-like grip. Retail sales in Scotland have still to emerge from the pandemic-induced funk, after eight months, deeply concerning at what is for many stores the start of the all-important festive period.”
The year-on-year rise in food sales value in Scotland accelerated from 3.7% in September to 4.4% in October, with anticipation of lockdown measures and restaurant restrictions cited as factors in the grocery sector’s strength.
However, the year-on-year decline in the value of non-food sales, which tend to represent more discretionary elements of consumer spending, accelerated from 14.2% in September to 19.3% last month.
Paul Martin, UK head of retail at accountancy firm KPMG, said: “October’s data perfectly reflect the crisis facing Scotland’s high streets.”
He believed accelerated growth in food sales provided some evidence that a tightening of restrictions and growing fears of a return to lockdown had encouraged stockpiling.
READ MORE: Ian McConnell on Brexit: Is illusory truth effect at play as Leavers lap up Tory Brexit? – Opinion
However, he added: “It isn’t enough to halt an overall decline. With non-food sales down by more than 19% and total year-on-year sales down…retailers are facing a daily fight for survival.”
He added: “Shifting consumer behaviour, driven by Brexit and Covid-19 uncertainty, is having an unprecedented impact on Scotland’s retail industry. We’re just a week away from Black Friday and in the middle of the so-called ‘golden quarter’, when the sector typically witnesses its biggest gains. This winter, to simply survive, retailers will have to double down on innovative strategies, pivot towards profitable online revenue growth and work even harder to tempt some shoppers back to physical retail spaces.”
Commenting on the mix of Scottish retail sales in October, Mr Lonsdale said: “Convenience store and other grocery sales fared well, temporarily buoyed as restrictions on eating out became more prevalent. With many office workers advised to stay home, sales of electronics, household goods and home office products remained high. There were even some signs of early festive shopping, particularly for Christmas decorations and gifting.”
Referring to the Scottish Government’s announcement yesterday that it was moving 11 council areas to tier-four restrictions, the SRC said: “This will see so-called non-essential shops in these council areas shuttered for three weeks, during what is traditionally the key trading period of the year for many.”
It added: “The SRC estimates this will affect over 45% of non-essential shops in Scotland, and those shops will lose out on over £90 million per week in lost revenue whilst they are closed.”
Mr Lonsdale said: “Many Scottish shops face a bitter winter following this deeply disappointing announcement on store closures.”
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here