Scottish retail sales rebound in February

According to the report from the Scottish Retail Consortium (SRC) and KPMG, February saw total Scottish sales decreased by 0.7 per cent compared with February 2015, when they had declined by 1.4 per cent.

Excluding Christmas and Easter, this is the best store performance of the past 12 months, ahead of the 3-month and 12-month average declines of 1.4 per cent and 1.8 per cent respectively.

Like-for-like sales decreased by 1.2 per cent on last February, when they had decreased by 2.3 per cent.

Adjusted for deflation measured by the BRC-Nielsen Shop Price Index (SPI), total Scottish sales increased by 1.4 per cent. This was also the best performance of the past 12 months, excluding Christmas and Easter.

Total Food sales were 1.1 per cent down on February 2015, when they had decreased 2.6 per cent.

This was the best Food performance of the past two years, excluding Christmas and Easter. Adjusted for the effect of online sales in Scotland, total Non-Food sales increased by 1.8 per cent over a rise of 0.5 per cent in February 2015.

This was driven by the Home categories while the Fashion ones saw a decline on an adjusted basis.

After diverging in January, the Scottish and UK performances have converged in February. Three-month average total Non-Food sales growth was 1.3 per cent (online adjusted) in Scotland, against 3.0 per cent in the UK.

David Lonsdale, director of the Scottish Retail Consortium, said: “Retail sales in Scotland saw a welcome return to growth last month, once adjusted for falling shop prices, which was a pleasant contrast to the dire performance witnessed in January and which most retailers were glad to see the back of.

“Indeed the overall monthly performance at store-level was the third best of the past year. Non-food retail sales growth, once adjusted for the effect of online purchasing, was solid driven by categories like furniture and home accessories, mobile phones, stationery and beauty products. The total value of grocery sales eased down once again in stores but performed ahead of the three-month average.

“Notwithstanding this more encouraging data, the exponential growth of government-imposed tax and regulatory costs remains a pressing problem at a time of great structural upheaval for the retail industry. Retailers are looking to the Chancellor’s Budget and the Holyrood election for a clear demonstration that our politicians recognise the challenges facing the industry, and that they are prepared to take concerted action to reduce the cost of doing business in Scotland.”

David McCorquodale, head of retail at KPMG, said: “Following a challenging January, there is a sense of improvement in Scotland’s retail sales figures this month, giving retailers some confidence that Scottish consumers are reacting to the normal operating levers. Although the weather didn’t relent for much of February, successful seasonal campaigns helped lift the gloom for many retailers.

“The headline figures may be negative but closer scrutiny gives cause for optimism leading up to Easter. The grocery sector continued to build momentum to its long haul out of the doldrums and a deflation-adjusted decline in total food sales of only 0.6 per cent is the best non-Christmas or Easter performance for some 25 months. Non-food sales growth of 1.8 per cent, adjusted for online sales, is well ahead of the twelve-month average of 0.6 per cent and was driven on by spending on the home – usually a sign of greater confidence – as well as sentiment around Valentine’s and Mother’s Day. Despite clothing retailers continuing to run promotions to cover the lost ground made in January, this was the worst performing sector. Easter falls early this year and the fashion world will hope for warmer weather to build momentum for the Spring/Summer collections.

“The Budget looms this afternoon and the retail sector, braced for the implementation of the National Living Wage, will be hoping for some measures to drive consumer confidence and spending.”