Although consumer confidence has improved massively in the past year or so, in Scotland it appears that shoppers remain unwilling to spend on their local high streets. This has seen total sales in February drop by 1.4 per cent year on year, raising concerns that not enough is being done to protect independent retail businesses north of the border.
According to the latest figures by the Scottish Retail Consortium (SRC) and KPMG’s retail sales monitor like for like sales, which exclude factors such as new store openings, tumbled by 2.3 per cent when compared to the same period in 2014. In part, this was due to an unprecedented 2.6 per cent plunge in total food sales thanks to the “highly challenging” conditions currently faced by grocers.
Non-food items also faced a challenging month, as it was only thanks to online sales that the category managed to post a 0.5 per cent rise in sales – marking the best performance since November 2014. However, when online sales were stripped out the category experienced a 0.5 per cent decline in total sales, again indicating that the high street is struggling to compete with the growing prowess of internet retailing.
Head of policy and external affairs at the SRC, David Martin, believes that the drop in sales may be due to consumers spending their disposable income elsewhere, with eating out and leisure pursuits still ranking highly in terms of consumer interest.
He says; “Food sales continued to struggle as any discernible recovery in household incomes, aided by lower interest rates and falling fuel prices, did little to translate into growth at shop tills.
“Whilst conditions remain highly challenging for grocery retailers, it is a great time to be a consumer with the cost of groceries declining at an unprecedented rate.”
But February’s results indicate that consumers in Scotland continue to seek bargains when shopping for luxuries, putting pressure upon retailers’ profit margins.
KPMG head of retail, David McCorquodale, says; “Health and beauty was a winner in February as St Valentine launched Cupid’s arrow and household appliance sales benefited from innovative new product launches.
“Fashion retailers had a mixed month, with discount-led promotions driving sales at the expense of margin.”
