‘Make-or-break’ for Scots retail sector
● Latest industry data shows food sales rising as nonfood plummets
Scottish retailers suffered a fresh fall in sales last month with fashion stores in the firing line, despite the sector “witnessing a recovery of sorts”, figures today suggest.
The latest sales monitor produced by the Scottish Retail Consortium (SRC) and KPMG reveals that total sales in Scotland fell by 8.3 per cent during July, compared with the same month in 2019.
Total food sales increased 3.5 per cent year-on-year, however total non-food sales tumbled 18.1 per cent.
Adjusted for the estimated effect of online trade, total non-food sales decreased by 5.2 per cent in July versus a year earlier.
Paul Martin, partner, UK head of retail at KPMG, said: “The latest figures highlight the scale of the challenge ahead for Scotland’s retailers. With store sales down 8.3 per cent year-on-year, we’re witnessing a recovery of sorts, but at a worryingly low pace.
“Once again, food sales have helped to mitigate some of the losses in the industry, with fashion retailers continuing to struggle as consumers focus on essential purchases.
“September is typically one of the strongest months of the year for Scottish high streets, so there will be a great deal of nervousness as we approach this period with furlough schemes tailing off and local lockdowns and travel restrictions continuing to put people off returning to a degree of normality. The industry is facing an uphill battle for survival. The next few months could be a crucial make-or-break period for many.”
The 8.3 per cent slump in total sales is an improvement on the 18.6 per cent decline recorded for June. That followed a 27.6 per cent slide in May, which was an improvement on the record fall of more than 40 per cent recorded in April – the first full month of lockdown.
Ewan Macdonald Russell, head of policy and external affairs at the SRC, added: “Although some high street stores were open throughout July, those in shopping centres, as well as hospitality businesses, were only permitted to open in the second half of the month as a result of the prolonged lockdown in Scotland.
“Those closures, along with difficult economic conditions appear to have impacted on both footfall and high street sales.
“Whilst these figures are a significant improvement on the dire numbers from full lockdown, they are still lower than expected for this time of year.
“Furthermore, even with some pent-up demand it’s likely the lost sales from spring and summer will not be recouped. For retailers taking very complex and costly measures to keep customers safe the next few months are likely to be very challenging, and regrettably we may see further businesses stumble under the unprecedented pressure they are facing.”
Today’s snapshot of the Scottish high street comes after Marks & Spencer yesterday took the axe to some 7,000 jobs as part of a further shake-up in the face of the coronavirus crisis.
The retail stalwart said the bulkofthecutswouldbemade across its stores, hitting about 12 per cent of its 60,000 shopbased staff, as well as a smaller number of support centre and regional management workers. The roles are set to go over the next three months.
“The industry is facing an uphill battle for survival. The next few months could be a crucial make-or-break period for many”
PAUL MARTIN, KPMG