The Courier & Advertiser (Fife Edition)
Christmas gives boost to Scottish retail sales
RETAIL: Clouds on the horizon with rising food prices and uncertainty over Brexit
Scottish retail sales increased 4.3% on a like-for-like basis last month, but the industry’s representative body warned of troubles ahead.
The rise compared to a 0.4% fall in sales of the same goods in December 2015.
The Scottish Retail Consortium (SRC) and KPMG study also found that total Scottish sales in the five December weeks rose by 0.7% compared with December 2015, when they fell 0.2%.
The 2016 performance was the strongest rise since January 2014 and higher than three-month and 12-month averages.
Adjusted for deflation, December 2016 sales increased by 2.1%.
Total food sales increased 2.5% on December 2015, the highest rise since October 2013.
Total non-food sales declined 0.7% but were higher than the three and 12-month averages, driven by a rebound in clothing and footwear.
Adjusted for the effect of online sales, total non-food sales increased 2.0%.
Ewan MacDonald-Russell, SRC head of policy and external affairs, said the encouraging performance “continues the autumn trend of a small but now sustained recovery in retail sales”.
Strong grocery sales, up 2.5% on December 2015, were driven by a late surge in customers stocking up for Christmas.
Non-food sales were also positive, due to online sales, with fragrance and mobile phones selling well.
He added: “Whilst a good Christmas is a real boost to Scottish retailers, there are some worries ahead.
“A number of economic indicators suggest that inflation is affecting input costs for retailers, and that’s already starting to feed through to the high street.
“Whilst total sales value may rise, that may not correlate with an increase in retail profits.”
He warned that shoppers and retailers would continue to feel the squeeze over the early months of this year.
Craig Cavin, KPMG’s head of retail in Scotland, said: “Strong Christmas sales will give retailers much-needed hope as they prepare for the coming months, when they will have to face up to the possibility of rising food prices and the ongoing uncertainty around Brexit.”