By Ian McConnell
Business Editor
SCOTTISH retail sales last month were down by 27.9 per cent on January 2020 – the sharpest year-on-year drop since last April – as shops remained “trapped in the depths of a dark and dismal winter” amid tightened coronavirus lockdown measures.
The sharp acceleration in the year-on-year decline in the total value of sales, from a corresponding 16.6% in December, is revealed in the latest monthly figures published today by the Scottish Retail Consortium.
However, the SRC, while highlighting the “depths” in which Scotland’s retail sector is stuck, welcomed a “bold” extension of business rates relief for the sector announced yesterday by the Scottish Government.
Finance Secretary Kate Forbes yesterday unveiled proposals for retail, tourism, hospitality and aviation businesses to pay no rates during the 2021/22 financial year, following confirmation of a further £1.1 billion of consequential funding arising from UK Government coronavirus spending.
Unveiling the extension of non-domestic rates relief, the Scottish Government said: “The move builds on the three-month rates relief extension announced in the Scottish Budget and will be taken forward provided the Scottish Government receives the funding already assumed from the UK Budget on 3 March, and that requisite funds are available to maintain existing support into 2021/22.”
It noted newspapers “will also continue to benefit from 100% relief for a further 12 months”.
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SRC director David Lonsdale said: “The Finance Secretary has once again moved with commendable speed to back businesses which have been left reeling by the impact of coronavirus. She has clearly listened to our representations and has responded positively to remove the burden of business rates from retailers for the next 12 months. This is a bold and significant move and a vital shot in the arm for the sector, much of which remains closed and faces an uncertain future.”
Noting the SRC had been “in the vanguard” of the campaign to extend relief, Mr Lonsdale added: “The business rates waiver has been a lifeline for the retail industry, much of which has had to cease trading three times so far during the pandemic whilst at the same time investing significantly in Covid safety measures. Scrapping business rates for the coming year provides a much-needed cashflow and confidence boost for the industry – Scotland’s largest private sector employer – as it hopefully emerges from lockdown and seeks to recover.”
The Scottish Licensed Trade Association declared the announcement by Ms Forbes was a “weight off our collective shoulders”.
SLTA spokesman Paul Waterson said: “Extending 100% rates relief for the next financial year gives pubs, hospitality and tourism a fighting chance when we do re-emerge from lockdown.”
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Andrew McRae, the Federation of Small Businesses’ Scotland policy chairman, said: “Extending rate relief for the next financial year will allow many more smaller firms to make it through to the end of this crisis and help them get back on their feet when the economy reopens.”
The SRC figures show the value of non-food sales in Scotland in January was down by 54.8% on the same month of last year. This was a sharp acceleration from a year-on-year decline of 33.4% in December.
Food sales value in Scotland in January was up by 4.3% on the same month of last year.
The year-on-year drop in total Scottish retail sales value last month was the worst for any January since comparable records began in 1999.
Ewan MacDonald-Russell, head of policy and external affairs at the SRC, said: “January’s Scottish sales figures show shops remain trapped in the depths of a dark and dismal winter. Spending plunged as [retailers] were forced to shutter shops and, in many cases, discontinue click-and-collect services. The figures were the worst monthly performance since April and the worst-ever January results and lengthened the run of falling sales figures to 12 successive months.
“There was little positive to report, with the only significant growth in food sales, albeit in the context of no competition from eating out as a result of the closed-down hospitality trade. Conversely there was bad news across non-food stores, with physical non-food retail seeing sales fall by half. Furniture retailers were feeling the pain after missing out on a key season, and other retailers continue to have to contend with immense logistical pressures as the lack of notice and ever-shifting regulations put exceptional pressure on operational models.”
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Paul Martin, partner and UK head of retail at survey sponsor and accountancy firm KPMG, said: “It should come as no surprise that Scottish retail figures remain subdued. With fresh restrictions introduced at the start of January, retailers have had to contend with another month of empty high streets as consumers stayed at home.”
He added: “Poor weather has exacerbated the issues, creating a perfect storm, with a total decline of almost 30% representing the worst figures we’ve seen since April last year.”
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