‘Dreich’ sales report for Scottish retailers

The figures show January saw total sales north of the border decline by 3.5 per cent compared with January 2016, when they had declined by 3.8 per cent, the last month in which the decline exceeded 3.5 per cent.

The figure is below the 3-month and the 12-month averages, both -1.3 per cent.

Adjusted for deflation measured at 1.7 per cent by the BRC-Nielsen Shop Price Index (SPI), January sales declined by 1.8 per cent.

Total Food sales declined 2.6 per cent on January 2016, when they had decreased by 5.8 per cent, this month’s growth the lowest since then. This pulls the 3-month average down to 0.2 per cent, and the 12-month average to -0.5 per cent, though the latter remains the best since August 2014.

Total Non-Food sales declined 4.3 per cent compared to January 2016, when they had decreased by 2.1 per cent.

This is lower than the 3-month and 12-month averages of -2.4 per cent and -1.9 per cent respectively.

Adjusted for the estimated effect of online sales, total non-food sales decreased by 1.8 per cent versus January 2016, when they had increased by 0.2 per cent.

On a 3-month basis, the Online-adjusted total non-food change was 0.5 per cent, above the UK average of 0.3 per cent for the second month in a row.

David Lonsdale, Director of the Scottish Retail Consortium, said: “These are somewhat dreich retail sales results for January, showing a dip of nearly two percent even when falling shop prices are taken into account. After the extravagances of the festive period, which saw solid sales growth in December and indeed during the final few months of last year, shoppers were clearly keeping a firmer grip on purses and wallets in January and focusing more on essential spending as lower footfall data for the period suggested.

“Grocery sales dwindled last month and non-food items fell back, even once increasingly popular online sales were factored in. In an otherwise drab overall set of figures, furniture, mobile phones and skincare products were among the better performers, as were grocery sales related to Burns Night and Chinese New Year.

“With the Chancellor’s Spring Budget and commencement of the Brexit negotiations just a month or so away, Scotland’s retailers will be looking for measures which help them keep down prices for consumers, and for the prioritising of tariff-free trade with the rest of the EU; especially on everyday staples such as food and clothing. The Scottish local authority elections are coming into view, and retailers are keen to see action which makes it easier and less costly to invest in our town centres and which improves footfall. In particular, more widespread use of local discretionary powers to reduce business rates and easier and more affordable parking for shoppers could help support struggling high streets.”

Craig Cavin, head of retail in Scotland at KPMG, said: “After December’s strong festive figures boosted Scottish retailers, January blues have struck. Having splashed out over the Christmas period, shoppers were keen to save money, despite the sales bringing prices down.

“As Hogmanay was included in January’s figures this year and December’s last year, total food sales fell by 2.6 per cent. After feasting over the festivities, consumers appear to have lost their appetite in the New Year.

“Non-food products saw the largest percentage fall year on year (4.3 per cent), with clothing and footwear’s poor performance condemning them to the bottom of the rankings in January. Returned Christmas gifts and January sales may have hurt profitability, but a later return to school meant children’s clothing performed better than adults’. The popularity of buying electricals and health and beauty products appears not to be just for Christmas, with demand for both sectors bucking the trend of non-food decline.

“January is usually a difficult month for purses and wallets across the country, as consumers count the cost of Christmas. It appears retailers are also counting that cost.”