Second Worst Scottish Retail Sales Fall Since 1999

The Scottish retail sector has experienced its second worst sales fall since 1999, according to latest figures from the Scottish Retail Consortium.

The SRC-KPMG Scottish Retail Sales Monitor for August 2011 reveals that like-for-like sales for the month were 2.1% lower than a year ago, when they had edged up 0.1%. Total sales were down 0.7% on August 2010, when they had increased 2.4%.

Food sales slowed after picking up in July. Non-food sales fell further below their year-earlier level. Clothing and footwear showed larger declines, despite increased discounting while big-ticket homewares purchases were still often deal-driven, hit by fragile consumer confidence and the weak housing market.

As in the UK, both like-for-like and total sales were worse than in July, with consumer confidence was still much weaker in Scotland than in the UK as a whole.

Richard Dodd, Scottish Retail Consortium head of media, said: "There's little to be optimistic about here. After May's minus 1.1 per cent, this is the second worst annual drop in total sales since we began compiling these figures in 1999.

"Most parts of Scottish retailing are suffering. Sales of non-food goods were down on a year ago for the fourth month in a row. Food and drink sales were up slightly but by less than inflation, meaning that people actually bought less.

"The coldest August weather since 1993 was no help but it's the impact of job fears and falling spending power that have left customers in Scotland less confident than those in other parts of the UK.

"The gap is narrowing but that has yet to help sales performance which was positive for the UK as a whole but not for Scotland.

"As the Scottish Government prepares to outline its Budget plans later this month, this is clear evidence that it needs to support retail as a source of investment and growth by not imposing new burdens."

David McCorquodale, head of retail in Scotland, KPMG, said: "The negative sentiment on Scotland's high streets continued in August.

"The decline in like-for-like sales in food and drink needs to be considered against a backdrop of food inflation in the last year and the continuing trend of the consumer staying at home to eat and drink rather than going to restaurants and bars.

"This suggests that consumers are trading down to cheaper meats and home baking while at the same time seeking out the best promotions on offer rather than being loyal to any one grocer.

"The non-food category has again been worst hit with a decline of 3.7 per cent from last year.

"The buying patterns of the consumer remain one of a flight to value, deferral of big-ticket purchases unless absolutely necessary and buying accessories to add new extras to an existing wardrobe rather than replace the entire outfit.

"With retailer margins already significantly reduced through promotional activity and another rent day looming later this month, cash management is a key focus for many retailers at a time when the big decisions are also being made for Christmas."

More retail news from Scotland.