Boost for shops
Discounts boost sales as online trading shows sign of peaking
Shoppers have enjoyed discounts
Deep discounting helped Scottish shops enjoy a bounce in sales and footfall and a potential return to growth.
Total sales increased by 1% compared to October 2018, though retail leaders are not getting ahead of themselves in the final few weeks before Christmas.
David Lonsdale, director of the Scottish Retail Consortium, said: “This is a sprightly set of results for October, highlighting a more broadly based pick-up in demand across retail sub-sectors.
“This was buoyed by exceptional discounting as retailers’ used keen prices and promotions to successfully drive footfall and demand.
“It also points to the volatility of retail market conditions at the moment, following a slew of poor months. The non-food category overall recorded its strongest performance for five years.”
The online market has become saturated in the ‘gold rush’– Kyle Monks, BRC
The latest data emerged as Kyle Monks, chief economist at the British Retail Consortium, told Daily Business that online sales may be peaking.
During a visit to members in Edinburgh, he said there was no support for taxing online retailers: “The online market has become saturated in the ‘gold rush’ and we are seeing online sales plateau. Most brands are already in that space.”
Mr Lonsdale said the campaign for reducing costs, particularly business rates would continue.
He said that if customers continue to hold out for steep discounts it will put severe pressure on retailers’ already thin profit margins.
“Overall these figures strike a more optimistic note at the start of the crucial ‘golden quarter’ trading period that leads up to Christmas.
“However, a big question remains over the future direction of consumer spending. The coming weeks and months will be dominated by the general election, Brexit and UK and Scottish budgets. Retailers will be hoping policy-makers keep consumer confidence and household disposable incomes uppermost in their minds.
Paul Martin, UK head of retail atKPMG, said: “After a particularly challenging and prolonged period of uncertainty, the latest figures provide some reassurance and confidence. With total sales increasing by 1% compared to October 2018, we’re finally witnessing a return to growth.
“The next few months will be crucial for Scotland’s high streets, as shoppers prepare for the festive spending period. A concerted effort from retailers has laid the foundations for a positive quarter. Naturally, we need to acknowledge the wider political and economic uncertainty, which continues to hold back growth opportunities.
“But, a positive turnaround in the figures will provide a welcome relief for the industry as a whole, and offers an injection of cautious optimism.”