SRC/KPMG: total Scottish retail sales decreased by 2.3% in January 2015 compared with January 2014

LONDON, 2015-2-18 — /EPR Retail News/ — In January 2015, total Scottish sales decreased by 2.3% compared with January 2014, when they had increased by 4.3%. Like-for-like sales decreased by 3.1% on last January, when they had increased by 2.5%. Adjusted for deflation measured by the BRC-Nielsen Shop Price Index, total Scottish sales decreased by 1.0%.

Total Food sales were 1.4% down on January 2014, when they had increased 1.0%. This is the best Food performance since June 2014.Total Non-Food sales were 3.0% down on the previous year when they had increased 7.0%. Adjusted for the estimated effect of online sales in Scotland, total Non-Food sales decreased by 1.1%.

Three-month average total Non-Food sales declined 0.2% (online adjusted) in Scotland against a 2.7% rise in the UK. The gap between Scotland and the UK three-month average total growth was -2.9 in January.

David Lonsdale, Director of the Scottish Retail Consortium, said: “The total value of Scottish retail sales slipped back last month, however this needs to be seen in the context of a bumper performance in the corresponding period last year.

“While sales of food edged down, it was nonetheless the best performing category – for the first time in four months – and recorded its best performance since last June. Non-food related sales eased back after a stellar performance in the same period in 2014, making for a pretty flat past quarter in the category once inflation is taken into account.

“Looking forward, retailers will be heartened by the Bank of England’s predictions of continued low inflation being outstripped by average pay rises. The Chancellor should seek to bolster this in his Budget next month with policies which stimulate retailers to invest and which boost disposable incomes such as reducing income taxes on low earners.”

David McCorquodale, Head of Retail at KPMG, said: “2015 got off to a difficult start for Scottish retailers ‎as sales shrank by more than two per cent against last year. Whilst the decline may be partly explained by more inclement weather this year and January being a strong month for sales last year, it is clear that the considerable saving felt by consumers in petrol and fuel bills is not finding its way to the High Street’s tills.

“‎The grocery sector was the best performer in Scotland: while sales are still declining there is evidence that the rate of decline has reversed. It may be some time till we herald growth again in this competitive market, which is also buffeted by price deflation, but the grocers will take heart that the worst may be in the past.

“With the gap widening ‎between the non-food sales decline when compared with the growth for the whole of the UK, Scottish retailers will be hoping for wage rate inflation to drive North before too long. With three more months of electoral campaigns ahead, retailers will wish to see some resolution to political uncertainty feed into consumer confidence.”

British Retail Consortium, 21 Dartmouth Street, Westminster, London, SW1H 9BP. 020 7854 8900.