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End to five month surge

Retailers suffer setback ahead of Black Friday sales

Black Friday

Retailers will be hoping for a lift from Black Friday (pic: Terry Murden)


 

Scottish retail sales “fell out of puff” last month after five month of positive figures, according to a trade association.

Sales fell by 0.6% on a like-for-like basis in October compared to the same month last year when they had decreased by 1.0%. This is below the three-month average of -0.2%.

David Lonsdale, director at the Scottish Retail Consortium, said: “After a positive run over the previous five months Scottish retail sales ran out of puff in October, recording an essentially flat performance once shop price deflation is taken into account.

“The growth in grocery eased back markedly, with non-food sales lethargic once again. Retailers will be hoping this dampening of consumer demand reflects only a temporary pause for breath, perhaps in anticipation of sharper deals becoming available in the Black Friday sales later this month.

“Food, mobile phones and gaming were the few bright spots. Clothing and footwear faltered despite widespread discounting and promotions, with bigger items such as household appliances and furniture faring poorly too.

“The two months leading up to Christmas account for a fifth of annual retail spend, and these figures strike a cautious note for the rest of this crucial trading period. Consumer demand has often proven a reliable source of economic growth and it’s crucial the Finance Secretary’s upcoming Budget reflects that and seeks to keep down the cost of living as well as the cost of doing business.”

Paul Martin, head of retail in Scotland at KPMG, said: “Scottish retailers will have been hoping for a strong start to the all-important golden quarter, but it wasn’t to be. Even food sales, which have provided a welcome relief for many retailers, saw its lowest growth since February 2017, factoring in Easter distortions.

“All eyes are on Black Friday’s heavy discounting, with savvy shoppers hesitant to part with more cash than necessary in the build-up to the festive period. That being said, shoppers invested in warmer clothing towards the end of the month as temperatures dropped.

“Some retailers have already been forced to bring forward planned promotional activity and flash sales to encourage spending, but it doesn’t appear to have had the desired effect. As we approach the most important time of the year for retailers, some tough decisions will need to be made between volume of sales and profit.

“Many in the retail community will also be looking ahead to December’s Scottish Budget, in the hope announcements will be made to ease pressure on businesses and provide financial relief for Scottish consumers.



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