Scottish retail sales decline by 0.9 per cent

Figures published today by the Scottish Retail Consortium (SRC) show total Scottish sales declined by 1.9 per cent compared with February 2016, when they had declined by 0.7 per cent.

This month’s decline is slightly more pronounced than the 3-month and the 12-month averages, both -1.4 per cent.

Adjusted for deflation measured at 1.0 per cent by the BRC-Nielsen Shop Price Index (SPI), February sales declined by 0.9 per cent.

Total Food sales rose 1.3 per cent versus February 2016, when they had decreased by 1.1 per cent. This month’s growth is clearly ahead of the 3-month and 12-month averages of 0.6 per cent and -0.3 per cent respectively.

This represents the highest 12-month average since July 2014.

Total Non-Food sales declined 4.4 per cent compared to February 2016, when they had decreased by 0.3 per cent.

This is lower than the 3-month and 12-month averages of -2.9 per cent and -2.2 per cent respectively.

It is the deepest Non-Food decline since November 2012 (excluding Easter distortions) but contains a negative distortion due to the timing of Mother’s Day.

Adjusted for the estimated effect of Online sales, total Non-Food sales decreased by 2.6 per cent versus February 2016, when they had increased by 1.8 per cent.

This is the deepest decline since May 2015 On a 3-month basis, the Online-adjusted Total Non-Food change was -0.6 per cent, the first decline since August.

David Lonsdale, director of the Scottish Retail Consortium, said: “This year has got off to a somewhat sluggish start for Scotland’s shopkeepers with a second successive month in which retail sales have nudged down. Even continued falling shop prices weren’t enough to staunch the decline, with retail sales performing less well last month than over the past quarter.

“In recent months we’ve seen a polarisation in the performance of food and non-food categories; which continued in February. Food sales continued to edge up, helped by good sales of wine and chocolates for St Valentine’s Day as well as stronger demand for grocers’ meal deals; which perhaps hints at less eating out during the period as consumers reined in spending. By contrast non-food categories fell back once again, particularly clothing, footwear and household appliances, though there was continuing interest in mobile phones, wearable technology and a revival in gaming products.

“These figures suggest Scottish consumers are maybe beginning to tighten their belts and acknowledge the strain from rising overall inflation and moderating wage growth, with council tax set to creep up soon too. The commitments to increase the UK personal allowance and maintain Scottish income tax rates at current levels will therefore provide timely and welcome support for family finances.”

Craig Cavin, head of retail in Scotland at KPMG, said: “February put an early spring in the step of food retailers, with like-for-like sales up 2.3 per cent after being adjusted for 0.4 per cent food inflation. However, they were the exception to the rule, as total Scottish retail figures flagged behind 2016 for the second month running. Non-food numbers continue to alarm, with the early sales instigated by retailers in November and December weighing heavily in 2017. In a troubling sign, non-food numbers adjusted for online sales were in the red for two consecutive months – something which did not happen in 2016.

“Half-term holidays meant families spent time together last month, but it seems this break was not spent on the High Street, as clothing and footwear sales fell.

“Business rates topped the Scottish media agenda in February, and retailers will welcome Derek Mackay’s move to cap rates increases in some areas, which may help keep struggling traders afloat.

“In coming weeks, retailers will hope non-food figures can match food and drink sales. Although brighter and longer days will make the High Street more appealing, any revival in non-food figures will also come online.”