Scottish Retail Sales Monitor
Little Cheer for Scots Stores as December Sales Disappoint
David Lonsdale, Director, Scottish Retail Consortium:
There was little Christmas cheer for Scotland’s retailers as the value of retail sales in real terms dwindled in December. The shine came off the ‘golden quarter’ of trading in the final three months of 2023 as once again what growth there was in sales was outpaced by rising shop prices. Despite a surge in last minute festive purchases and discounting by retailers, overall shoppers continued to pare back spending as concerns lingered over the cost of living and higher mortgages.
The bright spots were toys, gaming consoles, cosmetics, and online purchasing. Grocery sales fared well too albeit December was the weakest monthly performance in food of last year and much of the growth was a consequence of food inflation. Non-food categories overall declined with fashion, household appliances, furniture, and electricals all struggling. Sales of Christmas decorations flagged as consumers chose to reuse older baubles rather than splash out on new items.
Christmas is the key trading period for many non-food retailers. It’s when they generate the revenues that tide them over the fallow months early in the new year when sales are lower but when rents, rates and other bills still need paid. As the spotlight turns to the year ahead it remains to be seen whether customer confidence and spending will be lifted by reductions in employee national insurance contributions and the council tax freeze. What is not in doubt is that many retailers will feel the squeeze from several government-mandated costs rises, and it could be a nail-biting period ahead for some shopkeepers.
Paul Martin, Partner, UK Head of Retail, KPMG:
A tough year for the retail sector in Scotland was bookmarked by a fall in growth during December to the lowest level of the year.
While the festive season allowed for a rise in food sales growth, albeit at the slowest rate of the year, this was the only hopeful note. Despite some rays of light via strong sales in cosmetics and fragrances, due to early discounting, non-food item sales dipped as the cost of living crisis continued to bite.
We can now only look forward to a stronger 2024 but be cautious of ongoing uncertainties due to a range of factors from upcoming elections to product availability.
TO DOWNLOAD THE FULL REPORT PLEASE SIGN IN
Only members and associate members can access this exclusive insight.