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Discounting fails to lure shoppers

Worst Christmas sales for Scots retailers in 20 years

Sale shop retail

Even discounting failed to lure shoppers


 

Scottish retailers suffered their worst Christmas in 20 years as heavy discounting failed to lure enough shoppers into a festive spending spree.

Sales fell by 1.2% on a like-for-like basis compared to December 2017 when they had increased by 0.3%. However, the data also revealed that sales over the year were up, offering a glimmer of light for the sector.

The poor festive period may be a result of shoppers spreading their spending over a longer period. Ewan MacDonald-Russell, head of policy & external affairs at the Scottish Retail Consortium, said: “There was little Christmas cheer for retailers with the worst real term December sales figures in twenty years.

“Whilst the dip was less pronounced than that witnessed the previous month, it’s clear stores have suffered as consumer spending is pared back under pressure from inflation, rising household costs and against a backdrop of uncertainty.

“Food sales continue to grow, albeit at the lowest level since February 2017. Most of that growth is the consequence of food inflation, with consumers buying little more than the previous year. Regrettably non-food sales continue to decline, best symbolised by weak sales of Christmas decorations as consumers chose to reuse older baubles rather than splash out on new items.

“Christmas is the key trading period for retailers so these figures bookend an underwhelming 2018 for the industry. Nonetheless, despite the gloom retail sales actually grew by 0.3% last year, in line with recent Scottish GDP figures.

“What should concern policymakers more is sluggish retail sales can be a warning light for the wider Scottish economy. With political and economic uncertainty likely to continue, there may continue to be challenges ahead in 2019.”

Paul Martin, UK Head of Retail at KPMG: “Retailers were generous with discounts and other promotional offers throughout the month, but this wasn’t enough to encourage shoppers to the high street. Even taking into account online sales, total non-food sales declined by one per cent, the lowest December on record since 2008.

“2018 has been an extremely tough year for retailers, and as we enter 2019, the focus should be on remaining resilient in the face of both known and unknown factors.”



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