Slow Spring puts damper on retailers

Activity last month was below the three-month average of -1.1 per cent, which the SRC said was expected considering the Easter distortions.

Total sales in Scotland in April decreased by 3.4 per cent compared with April 2017, when they had increased by 2.5 per cent.

This is the lowest since January 2017 and below the three-month and twelve-month averages of -0.5 per cent and 0.0 per cent respectively.

Adjusted for deflation measured at 1.0 per cent by the BRC-Nielsen Shop Price Index (SPI), April sales decreased by 2.4 per cent.

Total Food sales in April decreased 0.8 per cent versus April 2017, when they had increased by 6.8 per cent.

The result is negatively distorted by the absence of Easter and therefore below the 3-month and 12-month averages of 3.5 per cent and 4.2 per cent respectively.

The 3-month and 12-month averages are above the UK’s levels of 3.0 per cent and 3.5 per cent respectively.

Total Non-Food sales declined 5.5 per cent in April compared to April 2017, when they had decreased by 0.8 per cent. The performance is the worst since April 2012, but is negatively distorted by the timing of Easter. This is below the 3-month and 12-month averages of -3.7 per cent and -3.3 per cent respectively.

Adjusted for the estimated effect of Online sales, Total Non-Food sales declined by 3.7 per cent in April versus April 2017, when they had increased by 1.1 per cent. On a three-month basis, the Online-adjusted Total Non-Food sales decreased by 2.0 per cent, below the UK decline of 1.6 per cent.

Ewan MacDonald-Russell, Head of Policy & External Affairs| Scottish Retail Consortium, said: “Retailers will be feeling decidedly queasy with these post-Easter figures. Granted April was distorted but it was the toughest month since April 2013 for the industry with a real-terms fall of 2.4 percent; with shoppers cutting back on both food and non-food purchases. Of particular concern are the non-food figures, which were the worst single month performance in six years.

“Food sales were quite resilient, especially since Easter fell in April last year. It’s apparent consumers continue to prioritise grocery shopping over more discretionary purchases, and there is still some food price inflation there. Non-food sales continue to struggle, although it was a better month for fashion sales.

“Against a backdrop of difficult trading conditions, and in the context of the disappointing footfall and vacancy figures we published this week, clearly Government needs to do more to help the industry.Scottish retailers continue to be penalised by the Scottish approach to the Large Business Supplement and the Apprenticeship Levy, both of which need urgent reform. With consumers also struggling with higher monthly bills, a failure to take action will only intensify the pressure on beleaguered High Streets.”

Craig Cavin, Head of Retail in Scotland at KPMG added: “Scottish retailers continued to struggle in April, with sales down 3.4 per cent compared to the previous year. This year the Easter rush fell into March, rather than April, so a like-for-like comparison doesn’t give the complete picture. The three-month average is slightly more palatable, with sales falling by only 0.5 per cent, but overall it remains a testing time for retailers.

“Shoppers continue to buy online, but on the high street, clothing performed better than in March, thanks to a few unseasonably warm days at the end of the month.

“While it won’t be plain sailing over summer, as retailers wrestle with GDPR and the impact this may have on online marketing drives, there will be a number of opportunities for retailers to make the most of. Bank holidays, the Royal wedding and the World Cup will offer retailers the chance to recover, whilst the European Championships and the 134th Open Championship will likely bring some much-needed additional footfall to Scotland’s high streets.”