Scots retail sector ‘fragile’ despite recovery in sales

● Higher inflation sees food sales jump year-on-year but non-food suffers decline

Scottish consumer confidence remains fragile, industry leaders today warned, despite an upturn in high street sales last month.

The latest retail sales monitor from the Scottish Retail Consortium (SRC) and KPMG showed takings nudging up 1 per cent on a like-for-like basis last month compared to September 2016, when they had fallen by 0.4 per cent.

Total sales, which factor in new store openings and extra selling space, rose by 1.1 per cent, year-on-year, last month. This was a stronger performance than the three-month and 12-month averages of 1 per cent and -0.3 per cent respectively.

September’s solid performance north of the Border was driven by food sales, which increased by 5 per cent versus September 2016. This makes the 12-month average growth 2.7 per cent – the highest since December 2013. Inflation is likely to have played a large part in the year-on-year jump in takings.

In contrast, total non-food sales fell by 2 per cent last month on the high street as consumers shied away from making “big-ticket” purchases.

Ewan Macdonald-russell, head of policy and external affairs at the SRC, said it had been “a bumper month for grocers”.

He added: “Clothing sales were also comparatively quite strong, leading to the second best growth of nonfood sales this year. The continued growth of online nonfood sales was enough to offset a 2 per cent fall in stores. However, there is no evidence nervous shoppers are committing to larger purchases; indicating that consumer confidence remains at best fragile.

“The evidence is that rising inflation continues to soak up a large proportion of household earnings, which should provide politicians considering imposing costs on consumers with serious food for thought.”

Craig Cavin, head of retail in Scotland at KPMG, said: “Clothing was a big winner in September, with mid-season discounts on autumn ranges tempting consumers to restock their wardrobes. The change in season also positively influenced health and beauty sales, with both highend and essential cosmetics brands seeing growth following seasonal promotions.”

Meanwhile, industry figures yesterday showed that each of Britain’s “big four” grocers lost customer share in the last quarter despite increasing sales as heavy discounters Aldi and Lidl collectively accounted for half of the entire market’s overall growth.

Morrisons was the best performer of the four over the 12 weeks to 8 October, with sales up 2.8 per cent, followed by market leader Tesco’s sales increase of 2.1 per cent, Kantar Worldpanel said.

Sainsbury’s sales were up 1.9 per cent and Asda saw growth of 1.8 per cent, but Aldi and Lidl continued to outperform their major competition with sales up 13.4 per cent and 16 per cent respectively to collectively add some £390 million.