With Christmas fast approaching, retailers are preparing for an influx of consumers hitting high streets nationwide over the next few weeks. The traditional Christmas rush usually begins in October and lasts through to the January sales – something that retailers will be counting on this year in order to make up revenues from poor results over the washout summer season.
Unfortunately, early signs indicate that the first post-recession Christmas will not be the welcome revenue boost hoped for – at least not for retailers in Scotland. Figures released by the Scottish Retail Consortium show that sales in the past month dropped by 1.3 per cent when compared to results from October 2011.
Shoppers in Glasgow City Centre
The news only worsens when shop price inflation is taken into account, as this raises the gap between October 2011 and October 2012 sales to 2.8 per cent. Across the UK as a whole, sales rose by 1.1 per cent this October, meaning that Scottish retailers have dropped substantially below the national average.
Food sales in Scotland were up 2.3 per cent, however, with comfort foods and early Christmas Dinner preparations accounting for a large part of this. Meanwhile, although non-food sales dropped by 4.7 per cent, clothing sales were said to be “positive”, indicating that major high street stores are inching towards recovery.
Part of the reason for this may be the spate of cold weather at the beginning of October encouraging consumers to add to their winter wardrobes. Although many will have shunned the idea of buying a new range of outfits, instead deciding to pick up essentials such as boots, coats, scarves and gloves, this is hardly surprising – after all, the UK is freshly out of recession and it will take some time before consumers begin to spend in earnest after so many years of scrimping and saving.
Head of retail at KPMG, David McCorquodale, highlighted the fact that the Scottish Retail Consortium Figures released this month show the largest drop in overall sales since January last year.
He said; “Food and drink sales failed to track inflation and, therefore, reflected a decline in volumes.
“Despite the cold temperatures in October, clothing and footwear sales had good growth in the first week but then faded in the latter half of the month.
“This shows consumers may have bought into autumn and winter collections but are still too nervous to fill their wardrobes with them – the recession may officially be over but it will take a little longer for consumers to feel they can spend freely again.”
Director of the Scottish Retail Consortium, Fiona Moriarty, believes that retailers have to do more to encourage consumers into their stores if they wish to see a boost in sales in time for Christmas.
She says; “September’s modest sales boost offered some cause for cautious optimism, but continuing concerns about the economy led many customers to batten down the hatches again in October.
“With consumer confidence at a six month low, hopes of sales picking up in the run-up to Christmas will hinge on retailers reading the market closely – that means offering customers opportunities for seasonal spending at competitive prices.”
Do you think Scottish retailers will be able to encourage a growth in sales by the time Christmas comes around, or will it take slightly longer before a full return to profit will happen?
Why do you think sales grew elsewhere in the UK but dropped so dramatically in Scotland – is it because Scottish consumers are more wary about spending than elsewhere in the UK, or is it more to do with the fact that retailers in Scotland are not offering as varied a range of promotions as in England, Wales and Northern Ireland?
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