Late Easter makes for slow March at Scottish tills

Figures compiled by the Scottish Retail Consortium in cooperation with KPMG show that in March, Total Scottish sales declined by 2.1 per cent compared with March 2016, when they had declined by 1.3 per cent.

March’s Total decline is more pronounced than the 12-month average of -1.5 per cent but is negatively distorted by the timing of Easter.

Adjusted for deflation measured at 0.8 per cent by the BRC-Nielsen Shop Price Index (SPI), March sales declined by 1.3 per cent.

Total Food sales rose 1.8 per cent versus March 2016, when they had decreased by 2.0 per cent. This month’s growth is clearly ahead of the 3-month and 12-month averages of 0.3 per cent and 0.1 per cent respectively. This is the first positive 12-month average since July 2014.

Total Non-Food sales declined 5.2 per cent compared to March 2016, when they had decreased by 0.8 per cent.

This is lower than the 3-month and 12-month averages of -4.7 per cent and -2.7 per cent respectively but is negatively distorted by the timing of Easter.

Adjusted for the estimated effect of Online sales, total Non-Food sales decreased by 4.1 per cent versus March 2016, when they had increased by 1.2 per cent. On a 3-month basis, the Online-adjusted Total Non-Food change was -2.9 per cent, with categories like Furniture negatively distorted by the timing of Easter.

David Lonsdale, Director of the Scottish Retail Consortium, said: “March saw a real-terms fall in retail sales of 1.3 percent, which is in line with the somewhat disappointing sales performance we’ve seen in 2017. However, these figures are heavily distorted as Easter falls in April this year.

“One trend is clear though. Despite retailers’ efforts to absorb costs, the impact of the fall in sterling on commodity prices is now clearly being seen through food price inflation. That’s contributed to improved food sales of 1.8 percent. However, the concern is that consumers spending more on food are shifting spending from other items; potentially exacerbating the stresses affecting non-food retailers.

“Because of the Easter distortion non-food sales were predictably negative; with sales adjusted for online falling by 4.1 percent. There were some bright spots, with health and beauty ranges doing well, partly driven by Mothering Sunday, but overall the picture is challenging for non-food sales.

“Retailers will now look nervously forwards to Easter, hoping this month’s depressed figures are result of deferred, rather than reduced, consumer spending. However, continued flat sales combined within increased inflation would definitely be a cause for concern; both for retailers and the Scottish Government.”

Craig Cavin, KPMG’s head of retail in Scotland, said: “March’s headline retail and non-food figures may cause concern at first glance, but a late Easter has negatively distorted the numbers. Retailers will be on the lookout for a bumper April, with school holidays bringing increased footfall and retail traffic.

“A rise in total food sales of 1.8 per cent brings the first positive 12-month average since July 2014, and looks to be the exception to the rule. However, a closer look shows this increase is in fact largely driven by food inflation.

“A 5.2 per cent year-on-year fall in total non-food sales appears drastic, but again the late Easter has taken its toll. The Easter weekend will provide bargains on big-ticket items such as furniture and white goods, and a boost for children’s clothing during the school holidays should bolster April stats.

“Looking forward, we can expect a sunnier April outlook, and retailers will be hoping consumers reach for their wallets and purses to take advantage of some of those Easter bargains. However, it is unlikely the anticipated Easter pickup will significantly alter the 3-month average trend of -2.5 per cent.”