The Courier & Advertiser (Fife Edition)
Shops look to summer
THE SUMMER season could be more important to the hard-pressed Scottish retail sector this year than Christmas, professional services firm PWC said yesterday.
The accountancy firm was speaking as the Office for National Statistics released new official figures showing the value of retail sales across the UK had increased by 0.4% in April in comparison with the same month last year.
However, the rate of the growth was the slowest seen since January 2010 and the 1.1% increase in the volume of goods purchased during April was also the smallest rise since August.
The value of food sales increased by just 0.1% — the slowest growth since records began in 1989— while sales of fuel dropped by 13.2% following a 5.3% in March.
The performance represented the largest percentage fall in fuel sales since February 1996.
Store price inflation slowed from 2.6% in March to 1.7% last month.
British Retail Consortium director general Stephen Robertson said the new figures showed it had been a particularly tough time for all retailers.
He said: “April sales were always going to struggle against a strong performance a year ago helped by better weather, a later Easter and an extra bank holiday then but real-terms sales declines are bad news.
“Falling inflation offers some hope for customers but disposable incomes are still dropping and people are not spending on things that aren’t immediate needs.
“Retailers are hoping the return of sun in the last few days and the build-up to this summer’s big events produces a much-needed lift in the public mood but a fundamental turnaround remains illusory.”
Cara Haffey, corporate finance director for PWC in Scotland, said the coming months could be make or break for many traders and she said there were concerns that some retailers may have overstocked in anticipation of a bumper summer sales uplift.
She said: “Much has been made of the feel-good factor surrounding the jubilee celebrations and the Olympic and Paralympic Games and the impact this could have on consumer spending.
“However, recent predictions of a sales boost have now been scaled back and we are concerned that some retailers may be caught out, having invested in extra stock.
“The main problem appears to be the dip in like-for-like sales experienced in April combined with news that the UK economy re-entered recession in the first three months of the year.
“April turned out to be a worse month than expected for some retailers and therefore the upturn in sales forecast for the summer months has become all the more critical. This summer could end up being more important than Christmas 2012 for some retailers.”
Ms Haffey said the internet was the most likely long-term driver of retail sales.
She said: “Retailers need to re-think their business structure and invest in their online capability in order to stay one step ahead of the shift in consumer shopping behaviour.”