SRC-KPMG: Total February 2014 Scottish sales decreased by 1.0% compared with February 2013

LONDON, UK, 2014-3-19 — /EPR Retail News/ — In February 2014 total Scottish sales decreased by 1.0% compared with February 2013, when they had increased by 0.7%. Like-for-like sales decreased by 2.5% on last February, when they had decreased by 0.1%. Taking account of shop price deflation at 1.4%, February total sales were up 0.5% in real terms.

Total Food sales were 1.3% down on February 2013, when they had increased 2.0%. Total Non-Food sales decreased by 0.7% on a year earlier when they had decreased by 0.5%. Adjusted more comprehensively for the estimated effect of online sales, total Non-Food sales would have increased by 1.3%.

Growth in Scotland was below the UK in February. The Scottish three-month average growth was 0.9%, now below the twelve-month average of 1.6%.

David Lonsdale, Director of the Scottish Retail Consortium, said: “These sales figures confirm that Scottish retailers experienced a challenging February. Following the drop in footfall we recorded earlier this week, we have seen total sales falling by 1 per cent and like for like sales dropping 2.5 per cent.

“As in the rest of the UK, we have seen a particularly tough environment in the food market. Margins are under pressure and while the intense competition brings benefits to Scottish consumers in terms of keeping prices low, it can be a challenging environment for the businesses involved.

“It is worth remembering that these results follow a strong start to the year in January and within the overall results there are also some categories that are performing strongly. Footwear in particular is well ahead of the UK average and online and multi-channel sales are also providing a boost for Scottish retailers.”

David McCorquodale, Head of Retail at KPMG, said: “February saw a reality check on the road to recovery as consumers shunned the economic indicators and refused to loosen the spending belts.

“Total food sales suffered their biggest drop, excluding Easter variations, since our records began in January 1999. The battle lines are well defined in this sector and price cuts announced in March will filter through in future months to the benefit of the consumer, but at a cost to the retailers and their suppliers in terms of margin. In non-food, clothing and footwear had a reasonable mid-season month with the weather wet rather than wintry. Adjusting non-food sales for the estimated effect of a more comprehensive set of on-line sales hints at modest growth.

“Looking forward, wage rate inflation and house price recovery are showing tangible recovery which will in turn be reflected in High Street spending. However, the next few months will be dominated by the spotlight being shone on the grocery sector and how that filters through to family budgets.”

British Retail Consortium, 21 Dartmouth Street, Westminster, London, SW1H 9BP. 020 7854 8900. info@brc.org.uk.

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