Scottish Retail Sales Monitor

Dec 19: Scottish Retail Sales Monitor

FESTIVE TRADING FAILS TO MUSTER MUCH CHEER

David Lonsdale, Director, Scottish Retail Consortium:

“It was more bleak midwinter than festive frolics for Scottish retailers as shop takings slipped during the critical Christmas trading period. Over the crucial two-month period leading up to Christmas, real terms sales dipped by 0.5 percent – the second successive year of negative figures. That rounded off a pretty tepid 2019, which saw Online-adjusted sales nudge up by 0.3 percent across the year.

“Christmas food sales were positive, with consumers able to take advantage of a vegetable price war as grocers cut the price of traditional staples such as brussels sprouts and parsnips to convince customers to do the big shop with them. Spirits, Gins, and soft drinks also all did well over the period. Non-food sales were mixed, with kitchen appliances, bluetooth devices and beauty ranges performing reasonably. However, clothing and footwear struggled, in part due to consumers looking to take more financially discerning and environmentally sustainable approaches to their Christmas shopping. Customers tended to shop early, around Black Friday discounting, and in the final few days before Christmas – with some retailers reporting as a consequence that Boxing Day sales were slow.

“Nonetheless retailers will be slightly disappointed, albeit a little relieved Scottish trading figures were a touch more buoyant than elsewhere in the UK. That provides two lessons for policymakers. It’s essential there continues to be a focus on keeping down costs for consumers, especially with a Scottish Budget imminent and siren calls for a myriad of measures which could put up costs for hard-pressed households. Just as crucially, with retailers facing very challenging trading conditions now is not the time to rip up the business rates system by abolishing the universal business rate – instead retailers want to see a reformed system with a competitive poundage rate.”

 

Paul Martin, Partner, UK Head of Retail, KPMG:

“The latest figures reflect the overwhelming challenges facing Scotland’s High Streets. 2019 was dominated by the loss of a series of high profile retail names, and it appears the usual pre-Christmas rush has failed to significantly turn around fortunes.

“At first sight, an increase in sales of 0.4 per cent offers some relief, but the late date of Black Friday has somewhat skewed the figures and, if we look at both November and December for comparison with last year, a drop in sales of almost 1 per cent offers a more realistic picture of the struggle facing the retail industry. With greater clarity over Brexit and a slight rise in overall business optimism, we could see consumer confidence return, but retailers are facing significant challenges, driven by a huge range of factors – from a reduction in traditional demand towards new channels, increased costs and continued economic uncertainty.”

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