Sales fall hits high street
Drop in retail figures blamed on bad weather as rest of UK shows increase
RETAIL sales value in Scotland has shown a sharp year-on-year fall, in contrast to a rise in the UK as a whole, with tough economic conditions and poor weather cited as crucial factors.
Publishing its figures for May, the Scottish Retail Consortium (SRC) highlighted a stronger economic backdrop in London and south-east England as a key reason for consistently weaker retail sales figures north of the Border than in the UK as a whole.
However, SRC head of policy David Martin also suggested poorer weather in Scotland than in other parts of the UK had weighed on the May retail sales figures by dampening demand for clothing and footwear. In contrast, sales of spring and summer fashions in the UK as a whole were strong in May, according to figures published last week by the British Retail Consortium (BRC).
The SRC figures, published today, show that the value of retail sales in Scotland in May was down by 3.1 per cent on the same month last year.
In the UK as a whole, the value of retail sales last month was up by 1.1 per cent on May 2014.
Mr Martin noted that, before the escalation of the global financial crisis and the deep recession of 2008/09, the year-on-year movement in retail sales had often been better in Scotland than in the UK as a whole.
He contrasted this with the situation in recent years of Scotland underperforming the UK as a whole consistently on the retail sales front, according to the monthly SRC figures.
Mr Martin said: “At the core, what you see is the impact of London and the south-east. It didn’t obviously dip so much, and it has rebounded much more quickly than what we have seen in the rest of the UK. That has definitely had an impact on households’ ability to spend and consumer confidence.”
He also highlighted the additional drag on Scottish retail sales in May arising from spells of cold and wet weather, describing this as a “slightly more superficial factor”. He noted this poor weather in Scotland had reduced demand for spring and summer ranges of clothing and foot- wear, as people continued to need to wear scarves and boots.
Mr Martin said: “Over May, we had more unsettled weather in Scotland. That did impact clothing sales.”
Commenting on Scotland’s more general underperformance of the UK in terms of retail sales since 2008, Mr Martin said: “It did go off a cliff in 2008, and it has never really rebounded.
“I think that gap is to do with the [lesser] resilience of the Scottish economy compared with the south of England … Right up until the crash, the Scottish sales [figures] were often ahead of the UK average. What we have seen is the Scottish economy was hit worse by the recession, and has taken longer to recover.”
The SRC noted that, adjusted for annual shop-price deflation put at 1.9 per cent by the BRC and market researcher Nielsen, the volume rather than value of retail sales in Scotland in May was down by 1.2 per cent on the same month of last year.
It observed that, adjusted for distortions in monthly sales figures relating to the timing of Easter, the year-on-year fall of 1.2 per cent in volumes in May was the steepest such decline since November 2012.
The value of non-food sales in Scotland in May was down by 3.9 per cent on the same month of last year. Food sales value north of the Border last month was down 2.1 per cent on May 2014.
David McCorquodale, head of accountancy firm and SRC survey sponsor KPMG’s UK retail sector practice, said: “There will be fingers crossed in the fashion trade for some sustained summer weather throughout June to boost sales before the holiday season, rather than be forced into heavy discounting.”
He added: “With the whole of the UK showing continuous growth in non-food sales, retailers will be keen to see Scottish consumers have the confidence to catch up and narrow the gap.”