End of year pick up for retailers

Shops enjoy festive flourish in tepid year

Princes St shoppingScottish retail sales fell in December but the 0.2% decline and a 1.1% rise in food were the best figures for two years.

Shopping was affected by the wet, but warm weather which meant more was bought online and there was a fall in winter clothing.

David Lonsdale (below), director of the Scottish Retail Consortium, said: “This positive set of results for December provided a final flourish to what was otherwise a tepid 2015 as a whole for retail sales in Scotland.

“Once adjusted for falling shop prices total retail sales increased by a commendable 1.8% last month, the best performance in almost two years. This was largely driven by purchases of festive food and drink in the run up to Christmas, although non-food categories continued to gather momentum most notably online.

“Grocery sales recorded their best monthly performance in over two years, while non-food categories such as home accessories, electrical goods and beauty products also did better. Indeed ‘other non-food’ was the best performing category during the whole of 2015, driven in part by improvements in the housing market. By contrast clothing and footwear sales in December returned its weakest performance for four months.

“Retail continues to be an industry in transition, with retailers navigating profound changes in shopping habits at the same time as falling shop prices and increasing government-imposed costs. It is far too early to say whether this uptick in December heralds the start of a more sustained recovery in the growth of total retail sales.

David Lonsdale“It does however reinforce the need for the political parties vying to become the next devolved government to prioritise policies which support consumer confidence, including greater certainty over the future direction of travel on council tax reform and the new Scottish income tax, and which tackle the soaring cumulative burden of government-influenced costs which can too often weigh down retailers investment plans.”

David McCorquodale, head of retail at KPMG, said: “A grocery-led festive season provided a year-end boost for Scotland’s rain-swept high streets to provide cheer and optimism for the year ahead.  After months in the doldrums, the food and drink sector provided the surprise package over Christmas in Scotland, returning to growth as consumers loosened their belts and treated themselves to a festive feast.

“Heavy rain and flooding meant shoppers took to the keyboard rather than the high street and unseasonably warm weather led to the fashion sector suffering a bit of a wash out, ending the year on a wave of discounts and online returns.  Spending on home and electricals benefitted with the overhang from Black Friday and a welcome post-Christmas boost.  However, the surprise winner in Scotland for the festive season was the beleaguered grocery market, which delivered both product and price to provide some encouragement for the year ahead.

“With business rates and the implementation of the national living wage keeping a focus on the costs of running a retail business, it is imperative that the politicians in an election year allow consumers to feel confident and retailers to focus on product rather than red tape.”

  • Total Scottish sales decreased by 0.2% compared with December 2014, when they had declined by 1.8%. This is the best performance since January 2014, excluding Easter distortions. Like-for-like sales decreased by 0.4% on last December, when they had decreased by 2.6%. Adjusted for deflation measured by the BRC-Nielsen Shop Price Index (SPI), total Scottish sales increased by 1.8%. The total year-on-year sales performance peaked significantly in the week containing Christmas day, illustrative of the impact of demand during the festive period.
  •  Total food sales were 1.1% up on December 2014, when they had decreased 1.9%, their best performance since November 2013, excluding Easter distortions. Adjusted for the effect of online sales in Scotland, total non-food sales increased by 1.8% over a decline of 0.5% in December 2014, their second best performance of 2015.
  • Three-month average total non-food sales growth was 0.7% (online adjusted) in Scotland, the third highest this year, against a growth of 1.5% in the UK, representing a 2.0 percentage point widening of the gap seen in November.


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