Easter upswing but non-food disappointing - SRC

This figure is positively distorted by the timing of Easter, the SRC said.

On a three-month basis, which irons out distortions, like-for-like reverted to growth, at 0.2 per cent.

In April, Total Scottish sales increased by 2.5 per cent compared with April 2016, when they had declined by 3.2 per cent.

This month’s growth is distorted by the timing of Easter but takes the 12-month average to -1.0 per cent, the highest since December 2014.

Adjusted for deflation measured at 0.5 per cent by the BRC-Nielsen Shop Price Index (SPI), April sales increased by 3.1 per cent.

Total Food sales rose 6.8 per cent versus April 2016, when they had decreased by 1.7 per cent.

This month’s positively distorted growth pulls the 3-month and 12-month averages to 3.2 per cent and 0.7 per cent respectively. This is the highest 3-month average since September 2013.

Total Non-Food sales declined 0.8 per cent compared to April 2016, when they had decreased by 4.4 per cent.

This is above the 3-month and 12-month averages of -3.6 per cent and -2.4 per cent respectively but is positively distorted by the timing of Easter.

Adjusted for the estimated of Online sales, total Non-Food sales increased by 1.1 per cent versus April 2016, when they had decreased by 2.4 per cent. On a 3-month basis, the Online-adjusted Total Non-Food change was -2.0 per cent, the deepest decline since our series began in Jan 2013, excluding Easter distortions.

David Lonsdale, Director at Scottish Retail Consortium, said: “The impressive spike in Scottish retail sales last month is encouraging, albeit it was flattered somewhat by the timing of Easter this year. Nonetheless retailers will look on this as something of a rainbow amongst the gathering storm clouds, given expectations of an unsettled and squally period ahead for consumer demand.

“There was a further and stark polarisation in the retail sales performance of food and non-food categories. Grocery did well, especially fayre associated with the Easter holiday period. Indeed the total value of food sales recorded their best three-month performance since autumn 2013, helped in part by the recent return of food price inflation. In contrast non-food items continued to drop, recording their poorest quarterly results – even adjusted for online sales – for over four years. Whilst kids’ school-wear did reasonably well, spending on items often considered less essential or which come with a larger price tag continued to wilt as shoppers took a more cautious approach.

“The overall performance last month was positive but could well prove short-lived. Retailers are grappling with several recent cost increases which are now really starting to take hold and which ultimately will affect margins and so their ability to invest. It will be a struggle to pass on these cost rises to increasingly cash-conscious shoppers, who are having to contend themselves with rises in inflation and council tax and measly real terms growth in wages.”

Craig Cavin, head of retail in Scotland at KPMG, added: “With Easter occurring in April this year, sales performance provided retailers with some respite after a difficult month. Providing further solace to the industry, the three-month average of retail sales – which levels out distortion – showed that like-for-like growth was up 0.2 per cent. Warm weather at the start of the month will have helped this growth, and as we move towards summer, retailers will be hopeful of a further lift in sales.

“It seems consumers placed festive feasts with friends and family at the heart of their Easter holidays, with grocers benefitting from a surge in food sales. However, this growth is likely to be heavily distorted by both the relatively late Easter and price inflation creeping into the mix. This jump may also be the reason that the three-month growth for food sales was at its highest since September 2013.

“Elsewhere, non-food retail sales were disappointing. Despite Easter, sales fell by 0.8 per cent year-on-year. Clearly bargain hunters seeking big-ticket items like furniture and white goods were not out in force, leaving retailers without the boost they may have expected.”