By Scott Wright

SCOTTISH retailers have warned of a “bumpy few months ahead” as sales stayed in positive territory for a fourth month in a row in February, boosted by purchases linked to Valentine’s Day.

Total sales in Scotland increased by nine per cent compared with February 2022, when they had grown by 35.9%, according to figures published by the Scottish Retail Consortium today. Sales in February were below the three-month average of 9.9% and the 12-month average growth of 10.2%, the SRC-KPMG Scottish Retail Sales Monitor shows.

With inflation remaining at elevated levels – the latest official figures show annual UK consumer prices index inflation eased to 10.1% from 10.5% in January – the SRC said a portion of the sales growth in February was more a reflection of rising prices than increasing volumes. Its report notes that, adjusted for inflation, sales had increased by just 0.6% year-on-year.

David Lonsdale, director of the SRC said: “Scottish retail sales held up better than expected in February. Whilst the real terms growth rate was admittedly slight it was nonetheless in positive territory for a fourth consecutive month. However, the challenges for retail are far from being in the rear-view mirror and the costs crunch affecting households and firms could make for a bumpy few months ahead.”

The impact of food inflation was underlined as SRC reported that total food sales increased by 13.3% in February compared with the same month last year, when they had risen by 0.4%. Te February rise was above the three-month average growth of 12%, and the 12-month average of 7.2%.

Total non-food sales increased by 5.3% versus February 2022, when they had grown by 65.6%. Non-food sales in February were below the three-month average increase of 8% and the 12-month average of 12.6%.

Mr Lonsdale added: “Purchases associated with Valentine’s Day were a stand-out performer, buoyed by sales of cosmetics, fragrances, jewellery, and chocolates. DIY and gardening products did well with households looking at home improvements whilst energy efficient appliances continued their strong run. Clothing and footwear benefited from shoppers spending early on summer fashion. Grocery sales reached their biggest uplift in 24 years albeit this was flattered entirely by rising food prices. By contrast, bigger ticket furniture items fared poorly.”

as did home entertainment appliances which had enjoyed a purple patch through much of the pandemic period.”

Paul Martin, partner and UK head of retail at KPMG, said: “While Scotland saw total sales growth in February of 9%, inflation is still running at around 10% and therefore any real terms growth was minimal.

“Consumers continue to hold back on non-essential spending as household budgets remain squeezed. With increases in energy, broadband, mobile phone and council tax bills on the horizon, consumers will continue to take steps to reduce spend where they can – switching where they shop, what they buy, whilst also cutting back on activities, such as eating out and takeaways.”

Mr Martin added: “The outlook continues to be challenging with falling consumer spending in real terms and as more people choose to shop by ‘occasion’, retailers will be pulling out the stops for a buoyant Easter and Mothers’ Day.”