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Figures at three year high

Shoppers give retailers a Christmas boost

Scotland’s retailers enjoyed their best figures for three years with year-on-year sales up 2.1% last month after adjustment for falling prices.

Total Food sales increased 2.5%, the highest since October 2013. This pulls the 3-month average to 1.1%, the best since December 2013, and the 12-month average to -0.7%, the best since August 2014.

Total Non-Food sales declined 0.7% compared to December 2015. Adjusted for the estimated effect of online sales, total non-food sales increased by 2%.

Ewan MacDonald-Russell, head of policy and external affairs at the Scottish Retail Consortium, said:  “It’s encouraging to see another good month’s performance, which builds on a good November, and continues the Autumn trend of a small but now sustained recovery in retail sales.

“Grocery sales were strong, up 2.5 percent on December 2015, the best performance in over three years. Food sales were driven by a late surge in customers stocking up for Christmas, demonstrating the crucial importance of the holiday.

“Non-Food sales were also positive, although once again online sales were responsible for the sales growth. As expected there were good sales of mid-priced items, with fragrance and mobile phone gifts performing well.”

Despite the improved figures, Mr MacDonald-Russell had a cautionary message for policy makers.

“Whilst a good Christmas is a real boost to Scottish retailers, there are some worries ahead. A number of economic indicators suggest that inflation is affecting input costs for retailers, and that’s already starting to feed through to the High Street.

“Those costs also mean that whilst total sales value may rise, that may not correlate with an increase in retail profits. Consequently both customers and retailers are likely to continue to feel the squeeze over the early months of 2017.”

Craig Cavin, head of retail in Scotland at KPMG which compiles the data, said: “It was a Merry Christmas for retailers in Scotland, and strong sales over this vital period will give the sector some confidence moving into 2017. Compared with figures from the previous year, December 2016 marks a significant increase in spending, for both online and High Street sales.

“Christmas feasts were the order of the month, with total food sales up 2.5% in December. With price increases likely over the coming year, consumers were happy to make the most of the festive discounts.

“The timing of Christmas also gave shoppers an extra day to grab last-minute gifts which, coupled with relatively calm weather in the weeks prior, all point towards favourable conditions for retailers. Online sales of home accessories, beauty products and toys played an important role in driving the 2% boost in non-food sales.

“Strong Christmas sales will give retailers much-needed hope as they prepare for the coming months, when they will have to face up to the possibility of rising food prices and the ongoing uncertainty around Brexit.”

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