SRC & KPMG: Scottish retail sales remain behind pre-Covid levels
Scottish retail sales remain behind pre-Covid-19 levels, according to the latest figures from the Scottish Retail Consortium (SRC) & KPMG Scottish Retail Sales Monitor.
Total sales in Scotland decreased by 6.3% compared with February 2020, when they had decreased by 0.8%. This was above both the 3-m and the 12-month average decreases of 9.4%.
Scottish sales decreased by 2.7% on a like-for-like basis compared with February 2020, when they had decreased by 1.6%. This is above the 3-month average decrease of 6.8% and the 12-month average decrease of 6.3%.
Total Food sales increased 3.5% versus February 2020, when they had increased by 2.9%. January was below the 3-month average growth of 3.8% and the 12-month average growth of 4.1%. The 3-month average was below the UK level of 8.1%.
Total Non-Food sales decreased by 14.5% in February compared with February 2020, when they had decreased by 3.8%. This was above the 3-month average decrease of 20.4% and the 12-month average decrease of 20.7%.
Adjusted for the estimated effect of Online sales, Total Non-Food sales decreased by 34.1% in February versus February 2020, when they had decreased by 2.4%. This is above the 3-month average decline of 34.8% and below the 12-month average decrease of 22.9%.
David Lonsdale, director, SRC, said: “February saw a further incremental improvement in Scottish retail sales, helped in part by purchases associated with St Valentine’s Day and a slight uptick in people returning to workplaces. However, retail sales still lag behind the comparable period prior to the pandemic, underlining the prolonged nature of the retail recovery.
“The polarisation between food and non-food continues. Food and drink sales continued to perform well, albeit buoyed somewhat by food price inflation. Retailers reported that larger furniture items sold well, often due to deals on interest-free finance. Beauty products and office-wear sales got a lift as more people started to return to the office. However, fashion and footwear as a whole was sluggish, held back by continuing challenges with securing timely supplies of stock from abroad which affected seasonal ranges.
“There is no shortage of storm clouds facing the industry at the moment and the outlook remains uncertain. Retailers continue to face difficult trading conditions due to supply chain challenges and weak demand, with rising inflation across the economy likely to crimp consumers’ spirits and their propensity to spend. This is set to be compounded by rising public policy costs over the coming weeks notably the reinstatement of business rates and the hike in employers’ national insurance contributions from the start of April. Policy makers can ease the strain over the coming months by keeping a tight lid on those costs under their control including taxes and regulation.”
Paul Martin, partner, UK head of retail, KPMR, added: “Scottish retail sales remained sluggish in February, remaining still some way off pre-pandemic levels of spending. A double whammy of rising inflation and supply chain issues continues to impact both shoppers and retailers alike, with many consumers choosing to cut spending in order to manage increasing household bills. Scottish retailers also face tough inflationary pressures and will have to make challenging decisions around how to manage supply chains, absorb higher costs, or pass them on without losing custom.”