SRC & KPMG: Scottish retail sales rose by 15.6% in December

Total retail sales in Scotland increased by 15.6% compared in December, compared to the same period the year before, when they had decreased by 16.6%, according to the latest Scottish Retail Consortium (SRC) and KPMG Retail Sales Monitor.

SRC & KPMG: Scottish retail sales rose by 15.6% in December

The figure was above the 3-month average growth of 7.4% and the 12-month average of 14.8%.

On a 2-year basis, total retail sales continue to perform well below pre-pandemic levels, with sales down 13.0% compared with December 2019.

Scottish sales grew by 13.4% on a Like-for-Like basis compared with December 2020, when they had decreased by 15.6%. This is above the 3-month average increase of 5.6% and the 12-month average of 12.8%.

Total Food sales increased 1.2% versus December 2020, when they had increased by 3.3%. December was above the 3-month growth of -0.6% and the 12-month average growth of 0.7%. The 3-month average was below the UK level of 0.3%.

On a 2-year comparison, Total Food sales grew 4.5% (Yo2Y) in December. This is above the 3-month average growth of 3.4%.

Total Non-Food sales increased by 27.7% in December compared with the same month in 2020, when they had decreased by 33.4%. This was above the 3-month average growth of 14.2% and the 12-month average growth of 26.7%.

On a two-year comparison, Total Non-Food sales declined by 27.7% (Yo2Y) in December. This is below the 3-mth average decrease of 26.1%.

Adjusted for the estimated effect of Online sales, Total Non-Food sales increased by 19.5% in December versus the same month last year, when they had decreased by 17.7%. This is above the 3-month average growth of 5.3% and below the 12-month average growth of 31.6%. The UK’s 3m average growth was 4.8%.

David Lonsdale, director of the SRC, said: “2021 finished with a mixed performance as Christmas trading beat the previous years’ frankly dismal figures for December but fell significantly short of pre-pandemic performance. Government instructions in the early to middle of the month to work from home and to keep socialising to a minimum had a chilling effect on retail sales, which were an eighth down on 2019.

“Grocery was a bright spot, as were purchases of Christmas decorations, as get-togethers of family and friends over the festive period returned and as Scots ate out less following fresh public health instructions. Christmas related gifting did well especially beauty and fragrances, sales of smaller electrical goods, and leisurewear. The cancellation of Christmas parties and social activities snuffed out the nascent growth in more formalwear seen in the early part of the month.

“The recovery of sorts in Scottish retail sales has been stymied for several months now and remains more sluggish and persistently weaker than across the UK as a whole. Last month’s trading rounded off a tough final quarter of the year for the industry in Scotland, which is concerning. It reinforces the urgent need for a retail recovery plan from government - more certainty over the future easing of Covid restrictions including the rescinding of the work from home order, grants for shops as Wales is offering, and a short-term shopper stimulus plan.”

Paul Martin, partner, UK head of retail at KPMG, added: “After promising volumes in November, Scottish consumers determined to enjoy the festive period got out and spent their money this year, causing retail sales in December to increase by just over 15% compared to 2020. However, the spread of the Omicron variant and updated Government guidelines naturally will have slowed spending during the final weeks of the year.

“While December’s figures are still behind pre-pandemic levels they do show a marked improvement on the previous year. Food sales in particular were the stand out performer during the festive period, with sales growing 1.2% compared with December 2020 and 4.5% compared with the same month in 2019.”

He concluded: “Retailers will be keeping close to Government COVID-19 updates and hoping consumer confidence holds up in order to offset the rising cost challenges they are likely to experience for the foreseeable future.

“Retailers have worked hard to manage factors in their control throughout the pandemic to adapt to the changing environment, but there are many macro factors outside of their control that could impact them this year. With many retailers cautiously optimistic for 2022, their top priorities will be focussing on continuously re-engineering their business models, ensuring they operate resilient supply chains and continue to have a tight grip on their costs.”

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