Scottish retail sales increased by 0.2% in February 2015, the best growth since November, SRC-KPMG

LONDON, 2015-3-18 — /EPR Retail News/ — In February 2015, total Scottish sales decreased by 1.4% compared with February 2014, when they had decreased by 1.0%. Like-for-like sales decreased by 2.3% on last February, when they had decreased by 2.5%. Adjusted for deflation measured by the BRC-Nielsen Shop Price Index, total Scottish sales increased by 0.2%, the best growth since November.

Total Food sales were 2.6% down on January 2014, when they had decreased 1.3%. Total Non-Food sales were 0.5% down on the previous year when they had decreased 0.7%. This is the best Non-Food performance since October 2014. Adjusted for the estimated effect of online sales in Scotland, total Non-Food sales increased by 0.5%, its best performance since November 2014.

Three-month average total Non-Food sales declined 0.4% (online adjusted) in Scotland against a growth of 2.2% in the UK, a narrowing of the gap seen in January.

David Martin, Head of Policy and External Affairs at SRC, said: “Whilst total Scottish sales increased – after adjusting for inflation – by an almost imperceptible 0.2% in February it was, yet again, another month of two halves. Non-food sales drove all of the growth in February and had their best online adjusted performance since November. Clothing and Footwear performed well for those retailers whose new spring ranges coincided with milder weather at the start of the month. Cupid was also busy and therefore so were many retailers as Valentine’s Day drove strong sales of beauty products, jewellery and food related gifts.

“Food sales, however, continued to struggle as any discernible recovery in household incomes, aided by lower interest rates and falling fuel prices, did little to translate into growth at shop tills. A range of factors are at play, with additional disposable income being directed at either Non-Food spending or towards other leisure pursuits such as dinning out, whilst fierce competition between the large multiple grocery retailers continues to impact sales values. Nevertheless, whilst conditions remain highly challenging for grocery retailers, it is a great time to be a consumer with the cost of groceries declining at an unprecedented rate.

“With the Chancellor unveiling his Budget today, retailers will be looking closely for policies which make it easier and less expensive for retailers to invest and which boost the spending power of households, particularly for those on lower incomes.”

David McCorquodale, Head of Retail at KPMG, said: “Deflation continues to dampen Scottish sales performance as the sluggish start to the year continued. The impact of falling prices again had a negative effect on total Scottish sales values which fell by 1.4% last month when compared with February 2014. Adjusted for deflation, total Scottish sales increased by only 0.2%, hinting that consumers are either keeping any savings made in energy and commodities or spending it elsewhere.

“Food retailers suffered most with total sales decline falling back to levels not seen since October last year, reflecting a setback on the long hard road to recovery in this sector. Health and Beauty was a winner in February as St Valentine launched Cupid’s arrow, and household appliance sales benefited from innovative new product launches. Fashion retailers had a mixed month with discount-led promotions driving sales at the expense of margin.

“Consumers are the beneficiaries of a deflation environment and are well informed of alternative ways to deploy their savings. Scottish retailers will have to look beyond simply discounting in order to drive Spring promotions and engage profitably with customers in the lead up to Easter.”

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