As retail footfall dropped by 30.1% in September, fears are mounting over how shops across Scotland will cope in the coming months.

British Retail Consortium figures have indicated that retail footfall saw only a 4.7 percentage point improvement from August. This remains below the longer-term 12-month average decline of 30.3%. Footfall on high streets declined by 36.9% year on year. They were the most negatively affected location in September, again falling below Shopping Centres for the second time since April 2018.

The Scottish Chambers of Commerce also revealed today in its Quarterly Economic Indicator that the outlooks for all sectors remains grim, particularly for businesses in retail and tourism, which have been hit hard by restrictions and face a bleak winter as business support and confidence plummets.

The report showed signs of fragile confidence emerged in some areas of business although this was compared to historic lows from the previous quarter when lockdown conditions prevailed. Trends remain significantly negative across most indicators when compared to pre-COVID-19 conditions.

It also found that employment levels remain on negative trends across all sectors while risk remains that unemployment is set to rise significantly due to continued restrictions and reduction in employee support. 

Furthermore, the indicator revealed that around a third of construction and manufacturing, four in ten retailers and more than half of tourism firms anticipate a further reduction in sales in Q4.

The number of financial and business services companies reporting concern about rising taxation is the also highest on record for the survey.

David Lonsdale said: “Scottish stores lost £2.3 billion of retail sales over the first six months of the pandemic, and have yet to claw their way back to pre-crisis levels. Shopper footfall is gradually returning but the impovement is painfully slow.

“The impact on city-center footfall in particular of the latest government restrictions on hospitality, coupled with a warning about using public transport, have yet to be seen but are unlikely to help over th enext few weeks. This is a real worry for consumer-facing firms in the run up to the critical Christmas trading period.”

Tim Allan, president of the Scottish Chambers of Commerce, added: “This latest survey shows how fragile some parts of the economy in Scotland remain during this crisis.

“It makes sense that there would be some improvement compared to the previous quarter when significant parts of the economy were in an almost unprecedented shut down. But this winter brings significant risks for business, including further lockdowns and a decline in government support.

“Now is not the time to cut lifeline support. We expect joblessness to continue to rise, hitting hard from the start of November. There’s an urgent need to bridge the skills gap between those who have lost their jobs to those employers that are still recruiting. Plans to develop and support training and retraining in areas such as digital and low carbon technologies will need to be implemented if we are going to build back better.

“Many sectors are showing increased worry about the risk of increased taxation. Coronavirus interventions represent a huge burden on the public finances, but we must ensure that business recovery is not strangled to repair them.”