First Fall in Scottish Retail Sales For Over a Decade

SRC-KPMG Scottish Retail Sales Monitor March 2011, released last week, shows the first fall in total Scottish sales for over a decade. Like-for-like food sales fell well below their year-earlier level and non-food sales showed a much steeper fall.

Date:

Tue, 26 Apr 2011

Source:

Scottish Retail Consortium

Scottish Retail Consortium:

website

Sales values were down 0.3% on a total basis from March 2010, when sales had risen 3.9%, boosted then by Good Friday and Easter Saturday falling in the March trading period. The decline in total sales was the first since the survey began in 1999. On a like-for-like basis, sales were 3.9% lower, against a 0.6% increase in March 2010, the worst drop since January 2000.

Like-for-like food sales fell well below their year-earlier level and non-food sales showed a much steeper fall. Consumers' underlying uncertainty about jobs and incomes, as well as the later Easter, hit both. Sales were often deal-driven. Larger purchases of homewares and furniture purchases were hardest hit.

As in the UK, total sales performance was the worst we've ever measured. Consumer confidence was still weaker in Scotland than in the UK as a whole, though both steadied in March.

Fiona Moriarty, Director of the Scottish Retail Consortium, said:
"This is the first time total Scottish sales have been less than for the same month the previous year since we started this survey in 1999. The fact that the Easter spending boost falls in April this year but was mostly in March in 2010 is a contributory factor, but the drop can't be accounted for by that alone.

"Reality is biting for Scottish shoppers. People are increasingly nervous about the economy and their personal finances and are reluctant to spend unless they have to. Food sales have slowed markedly while non-food sales have seen a much steeper fall.

"Consumers in Scotland don't have the confidence to spend on large items for the home or buy into new fashion lines. Where they are spending, the focus is on bargains and price cuts. The current spell of warm weather and the approach of Easter offer some hope but it will take more than sunny bank holiday weekends to fundamentally change the gloomy retail outlook."

David McCorquodale, Head of Retail in Scotland, KPMG, said:
"Like for like sales in Scotland were down by 3.9 per cent in March, representing the worst set of statistics in eleven years, with declines in both food and non-food sales.

"The food sector results may be distorted this month because some of the Easter purchasing fell into March last year. However, while this year's later Easter may be a factor behind the drop of 1.7 per cent in food sales, it doesn't mask the drop in volumes which have been offset to an extent by significant inflation in food prices.

"The most significant impact is seen in non-food sales, which fell by a massive 5.9 per cent. We have seen an emergence of new, lower spending patterns since the middle of January as consumers re-adjust their family budgets to take into account the combination of mounting fuel and utility costs, falling house prices, higher VAT and real inflation. Many retailers will not be able to sustain this ongoing weakness in demand beyond the short term and are hoping for some good news around the extended bank holiday period and a feel-good factor driven by the Royal Wedding. However, as disposable income continues to fall, without reducing saving or increasing borrowing – which would oppose current trends – this will not be possible."

More information on the Scottish Retail Sales Monitor

More grocery retail news

All form fields are required.