Scottish Retail Sales Monitor

No recovery in sight as sales fail to improve

Ewan MacDonald-Russell, Head of Policy & External Affairs , Scottish Retail Consortium:

“Another month of disappointing sales confirms Scottish retail is nowhere near returning to growth. A real terms fall of 4.4 percent is the eighth successive month of falling sales and a huge concern to the industry ahead of the crucial Christmas trading period.

“Food sales returned to more buoyant growth, correlating with the end of the Eat Out to Help Out scheme. Whilst positive for grocers, there was little evidence of customers stockpiling over the month, instead it appears to be a shift from discretionary to essential spending. Non-food sales continue to diverge sharply by category. White goods, household essentials, and electronics continue to perform well, with televisions and gaming boosted by new releases. Conversely, fashion, footwear, and beauty products continue to perform poorly with customers only buying necessary rather than indulgent products.  There is also some evidence consumers are already turning to Christmas shopping – presumably to avoid queuing outdoors in the depths of the Scottish winter.

“Overall, the Scottish retail industry is in fragile condition heading into the golden trading quarter. There are severe headwinds ahead. Whilst shops can continue to trade, the lockdown of hospitality businesses removes reasons to visit town and city centres. The costs of operating safely continue to skyrocket – few retailers can operate profitably under these conditions. With that in mind policymakers need to avoid further pressure on the industry, there is no capacity to absorb further costs whilst the current crisis continues.”

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

“Whilst September’s figures paint a slightly less bleak picture for Scotland’s High Streets, the challenges facing retailers show little signs of abating. Total year-on-year sales were down 6.0%, which is a modest improvement from August’s 7.5% drop. However, with the resurgence of stricter lockdown rules and the prospect of a no-deal Brexit, consumer confidence remains low.

“Within specific categories, it’s clear that consumer expenditure has continued to shift away from non-retailing categories like travel and leisure, whilst the focus remains on food, furniture and electronic goods. Elsewhere, non-food and fashion & footwear retailers suffered a month of woeful performance, with demand seen only for children’s clothing, in a period in which outfits for seasonal events should usually have been purchased. Shoppers are certainly being less impulsive and far more targeted with how and where they choose to buy goods, given current uncertainties and economic concerns.

“As we enter the crucial ‘golden quarter’ period – when many retailers make the majority of their revenue – Scotland’s retailers will be fighting for survival and recovery. The retail landscape has changed massively and with key events like Black Friday on the horizon, the focus will be on learnings from recent months, reducing costs and implementing innovative ideas to drive up demand and conversion rates.”

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