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Shops feel January pinch

Shops suffer Christmas hangover as sales slump

Shoppers spent heavily in the run-up to Christmas (photo by Terry Murden – DB Media Services)

‘Dreich’ high street figures

Retailers suffered a post-Christmas hangover with Scottish like-for-like sales plunging by 3.2% last month after shoppers enjoyed a festive spending binge.

Total sales fell by 3.5% compared with January 2016, when they had declined by 3.8%, the last month in which the decline exceeded 3.5%.

The numbers were announced as UK inflation rose from 1.6% to 1.8%, driven largely by higher fuel costs. The latest rate is the highest for two and a half years.

David Lonsdale, director of the Scottish Retail Consortium, said: “These are somewhat dreich retail sales results for January, showing a dip of nearly two percent even when falling shop prices are taken into account.

“After the extravagances of the festive period, which saw solid sales growth in December and indeed during the final few months of last year, shoppers were clearly keeping a firmer grip on purses and wallets in January and focusing more on essential spending as lower footfall data for the period suggested. 

“Grocery sales dwindled last month and non-food items fell back, even once increasingly popular online sales were factored in. In an otherwise drab overall set of figures, furniture, mobile phones and skincare products were among the better performers, as were grocery sales related to Burns Night and Chinese New Year.

“With the Chancellor’s Spring Budget and commencement of the Brexit negotiations just a month or so away, Scotland’s retailers will be looking for measures which help them keep down prices for consumers, and for the prioritising of tariff-free trade with the rest of the EU;,especially on everyday staples such as food and clothing.

“The Scottish local authority elections are coming into view, and retailers are keen to see action which makes it easier and less costly to invest in our town centres and which improves footfall. In particular, more widespread use of local discretionary powers to reduce business rates and easier and more affordable parking for shoppers could help support struggling high streets.”

Craig Cavin, head of retail in Scotland at KPMG, which compiles the data, said:After December’s strong festive figures boosted Scottish retailers, January blues have struck. Having splashed out over the Christmas period, shoppers were keen to save money, despite the sales bringing prices down. 

“As Hogmanay was included in January’s figures this year and December’s last year, total food sales fell by 2.6%. After feasting over the festivities, consumers appear to have lost their appetite in the New Year.

 “January is usually a difficult month for purses and wallets across the country, as consumers count the cost of Christmas. It appears retailers are also counting that cost.”

This month’s figure is below the 3-month and the 12-month averages, both -1.3%. Adjusted for deflation measured at 1.7% by the BRC-Nielsen Shop Price Index (SPI), January sales declined by 1.8%.

Total non-food sales declined 4.3% compared to January 2016, when they had decreased by 2.1%. This is lower than the 3-month and 12-month averages of -2.4% and -1.9% respectively.

Adjusted for the estimated effect of online sales, total non-food sales decreased by 1.8% against January 2016, when they increased by 0.2%. On a 3-month basis, the online-adjusted total non-food change was 0.5%, above the UK average of 0.3% for the second month in a row.

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