SRC-KPMG: Scottish sales decreased by 3.8% in January 2016 vs the same month last year

  • In January 2016, total Scottish sales decreased by 3.8% compared with January 2015, when they had declined by 2.3%. This is the weakest Store performance since April 2012, but follows the best performance since January 2014 in the prior month. Like-for-like sales decreased by 4.0% on last January, when they had decreased by 3.1%. Adjusted for deflation measured by the BRC-Nielsen Shop Price Index (SPI), total Scottish sales decreased by 2.0%.
  • Total Food sales were 5.8% down on January 2015, when they had decreased 1.4%, their slowest year-on-year performance on record. Adjusted for the effect of online sales in Scotland, total Non-Food sales increased by 0.2% over a decline of 1.1% in January 2015, their worst performance since October 2015.
  • Three-month average total Non-Food sales growth was 0.9% (online adjusted) in Scotland, against a growth of 2.8% in the UK.
  • LONDON, 2016-Feb-17 — /EPR Retail News/ — David Lonsdale, Director of the Scottish Retail Consortium, said: “There is no denying that these are dour retail sales figures for January, showing a decline of two percent even once falling shop price inflation is taken into account. After the excess of the festive period, which saw solid retail sales growth in December, shoppers were clearly keeping a firm grip on purse strings and wallets in January even as footfall improved.

    “Food sales plunged last month, albeit after a strong showing the previous month, and at a faster rate than the 3-month average. The total year-on-year change of retail sales of non-food items dipped too. However, after taking account of the trend for online purchasing and discounting by retailers to shift stock, non-food sales remained positive. In fact, the 3-month trend for online adjusted non-food achieved its best performance since September 2015. Other non-food was the best performing category from an otherwise drab overall set of figures, with sales of larger furniture items holding up well. Clothing and footwear followed closely, with winter clothing, boots and sport shoes amongst the stand out performers during the month.

    “With the Chancellor’s Budget just a month away and the publication of the Holyrood election manifestos almost upon us, Scotland’s retailers will be looking for measures which will further improve consumer confidence, boost disposable incomes and keep down the cost of living. With half of VAT receipts being assigned to the Scottish Parliament our politicians at Holyrood have a direct stake in facilitating a flourishing retail industry.”

    David McCorquodale, Head of Retail at KPMG, said: “Storms battered the Scottish high streets in January, resulting in the weakest performance for some time and a washout to start 2016. With the month producing 145 per cent of average rainfall and only 63 per cent of average sunshine, it was one of the wettest and dullest Januarys for a century. As a consequence, total sales were down by 3.8 per cent compared with last year.

    “Food sales were particularly badly hit, falling by 5.8 per cent. Having enjoyed one of its best months for a couple of years in December, the grocers will be hoping figures for January were a consequence of the deluge rather than the post-Christmas diet. Even with the benefit of adjusting for the effect of online sales, the weather put the brakes on recent growth in non-food sales, which increased by only 0.2 per cent.

    “With an election looming and ongoing challenges in the oil and gas industry, the Scottish retail sector will be looking to the Government to find ways to encourage consumer confidence and to alleviate unnecessary burdens on retailers. They will also be hoping the latest sales decline was genuinely weather related rather than consumer malaise.”

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

    SRC-KPMG: Scottish retail sales decreased by 0.2% in 2015 compared with December 2014

    • In December 2015, total Scottish sales decreased by 0.2% compared with December 2014, when they had declined by 1.8%. This is the best performance since January 2014, excluding Easter distortions. Like-for-like sales decreased by 0.4% on last December, when they had decreased by 2.6%. Adjusted for deflation measured by the BRC-Nielsen Shop Price Index (SPI), total Scottish sales increased by 1.8%. The total year-on-year sales performance peaked significantly in the week containing Christmas day, illustrative of the impact of demand during the festive period.
    • Total Food sales were 1.1% up on December 2014, when they had decreased 1.9%, their best performance since November 2013, excluding Easter distortions. Adjusted for the effect of online sales in Scotland, total Non-Food sales increased by 1.8% over a decline of 0.5% in December 2014, their second best performance of 2015.
    • Three-month average total Non-Food sales growth was 0.7% (online adjusted) in Scotland, the third highest this year, against a growth of 1.5% in the UK, representing a 2.0 percentage point widening of the gap seen in November.

    LONDON, UK, 2016-Jan-22 — /EPR Retail News/ — David Lonsdale, Director of the Scottish Retail Consortium, said:“This positive set of results for December provided a final flourish to what was otherwise a tepid 2015 as a whole for retail sales in Scotland. Once adjusted for falling shop prices total retail sales increased by a commendable 1.8 per cent last month, the best performance in almost two years. This was largely driven by purchases of festive food and drink in the run up to Christmas, although non-food categories continued to gather momentum most notably online.

    “Grocery sales recorded their best monthly performance in over two years, while non-food categories such as home accessories, electrical goods and beauty products also did better. Indeed ‘other non-food’ was the best performing category during the whole of 2015, driven in part by improvements in the housing market. By contrast clothing and footwear sales in December returned its weakest performance for four months.

    “Retail continues to be an industry in transition, with retailers navigating profound changes in shopping habits at the same time as falling shop prices and increasing government-imposed costs. It is far too early to say whether this uptick in December heralds the start of a more sustained recovery in the growth of total retail sales. It does however reinforce the need for the political parties vying to become the next devolved government to prioritise policies which support consumer confidence, including greater certainty over the future direction of travel on council tax reform and the new Scottish income tax, and which tackle the soaring cumulative burden of government-influenced costs which can too often weigh down retailers investment plans.”

    David McCorquodale, Head of Retail at KPMG, said: “A grocery-led festive season provided a year-end boost for Scotland’s rain-swept high streets to provide cheer and optimism for the year ahead. After months in the doldrums, the food and drink sector provided the surprise package over Christmas in Scotland, returning to growth as consumers loosened their belts and treated themselves to a festive feast.

    “Heavy rain and flooding meant shoppers took to the keyboard rather than the high street and unseasonably warm weather led to the fashion sector suffering a bit of a wash out, ending the year on a wave of discounts and online returns. Spending on home and electricals benefitted with the overhang from Black Friday and a welcome post-Christmas boost. However, the surprise winner in Scotland for the festive season was the beleaguered grocery market, which delivered both product and price to provide some encouragement for the year ahead.

    “With business rates and the implementation of the national living wage keeping a focus on the costs of running a retail business, it is imperative that the politicians in an election year allow consumers to feel confident and retailers to focus on product rather than red tape.”

    SOURCE: British Retail Consortium

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

    Scottish Retail Consortium Director David Lonsdale on reviewing business rates in Northern Ireland

    LONDON, 2015-10-29 — /EPR Retail News/ — Responding to the publication by the Northern Ireland Executive of a consultation paper reviewing business rates in Northern Ireland, the Director of the Scottish Retail Consortium, David Lonsdale, said:

    “Just as in Northern Ireland, the £2.8 billion Scottish system of business rates is not fit for purpose, disincentivises investment and has become a disproportionate burden on businesses the length and breadth of the country. Now that a government review is taking place in Northern Ireland, as is currently the case in England, it is even more imperative that Scottish Ministers look again at this issue and options for a fundamentally reformed approach to rates that better reflects economic conditions, promotes growth and reduces the tax burden.”

    ENDS

    Notes to editors
    1. The SRC published its Holyrood 2016: Business Rates in August 2015. You can find the publication here

    For media enquiries please contact David Martin, Head of Policy and External Affairs at the SRC: 07880039743 david.martin@brc.org.uk

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

    Scotland’s retail industry unveils plans for an overhaul of business taxation

    LONDON, 2015-8-27— /EPR Retail News/ — Scotland’s retail industry is seeking to concentrate the minds of policy makers and politicians on lifting the country’s economic growth and productivity ahead of the 2016 Holyrood election, through unveiling plans for an overhaul of business taxation.

    Launching the first in a series of election policy papers (‘Holyrood 2016: Business Rates’ can be downloaded from the right-hand side), the SRC is setting out a range of measures for the reform of the £2.8 billion business rates tax for inclusion as an early priority in the next Administration’s Programme for Government.

    A growing coalition of businesses and representative organisations have recently made the case for the fundamental reform of business rates in Scotland.

    The SRC has set out medium and longer term ambitions including the need for a firm commitment to a fundamental structural reform of business rates, including consideration of whether the business rates system should remain a property-based tax.

    In addition the SRC has set out a range of short term reforms that are urgently required to arrest the number of store closures, assist town centres, support business investment and protect jobs. These measures include the introduction of more frequent revaluations, a lower retail-specific poundage, empty property relief for premises undergoing investment and refurbishment and a wide range of administrative improvements including standardised online billing and a reduction in the number of Assessors from 14 to 1 into a single National Assessor.

    Commenting on the launch of the policy paper, SRC Director David Lonsdale, said:

    ‘Ahead of the Holyrood election there needs to be a thorough debate about how the next Scottish Administration and Parliament will seek to help raise the country’s rate of economic growth and improve business productivity.

    ‘Lifting private sector investment will be crucial to achieving this. There is a strong and growing consensus across business and industry in Scotland that the current business rates system is inadequate to the task, out of date, no longer fit for purpose and in serious need of fundamental reform.

    ‘The system is a tax on jobs and growth, undermining investment in property, especially in town centres and high streets. There is no greater pressing issue for the retail industry in Scotland than the prohibitive burden of business rates, which has moved in the eyes of many retailers from an irritation to mission critical in recent years.

    ‘This is not just a problem for businesses, store closures have a significant and detrimental impact on communities and town centres and lead to a loss in government revenue through other taxes.

    ‘That is why we have launched our proposals for reform which are vital for securing a competitive business environment in Scotland.’

    ENDS

    Notes to editors:
    1. A copy of the ‘Holyrood 2016: Business Rates’ paper can be downloaded from the right-hand side.
    2. The Business Rates paper follows a previous publication launched by the SRC, early in 2015, making the detailed case for business rates reform. A copy of Business Rates: Fundamental Reform can be accessed here
    3. The retail industry contributes around £2 billion in taxes per year in Scotland across the top five taxes of VAT, income tax, national insurance, business rates and corporation tax. Of the £2 billion, retail contributed close to £700 million in business rates (around a quarter of the total take from business rates) and more than the entire tax contribution from the Oil and Gas sector.
    4. Business rates paid by retail in Scotland have increased by 30 per cent between 2009 and 2014. Over that same period these has been 1,800 fewer shops and the vacancy rates is ‘stuck’ at 1 in 10 shops. Every one per cent increase in the vacancy rate equates to a loss of around 2,550 retail jobs in Scotland.
    5. In 2005, business rates made up around one-third of all taxes borne by retailers. By 2014 this had grown to nearly 50 per cent.
    6. Since 2007 there has been a 42 per cent increase in the revenue derived from business rates but only a seven per cent increase in council tax. However, council tax is under review by an independent government appointed Commission whilst business rates have been largely ignored.
    7. A range of businesses and representative groups are supporting the call for reform including the Scottish Chambers of Commerce, RICS, Scottish Property Federation, Association of Town and City Management Scotland, Scotch Whisky Association, Publishing Scotland, Intu Properties, National Federation of Retail News, Scottish Engineering and the Scottish Grocers’ Federation.
    8. In November 2014 a poll of MSPs revealed that 69 per cent agreed that the current system of business rates is in need of reform with only nine per cent disagreeing.

    For media enquiries please contact David Lonsdale, SRC Director, 07801629088 david.lonsdale@brc.org.uk

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

    Scottish Retail Consortium responds to the Commission on Local Tax Reform

    LONDON, 2015-6-15 — /EPR Retail News/ — The SRC has submitted a written response to the Commission on Local Tax Reform. The SRC is ‘open’ to council tax being replaced or reformed but wants to see any major changes or alternative system underpinned by support for consumer confidence and subject to a robust and convincing cost benefit analysis. The SRC submission also highlights how revenues from business rates have been picking up an ever large proportion of local authority budgets compared to receipts from council tax.

    Please find the written response downloadable on the right.

    For more information please contact David Lonsdale, Director of Scottish Retail Consortium, david.lonsdale@brc.org.uk 07801629088.

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