Retail sector concern over tax rise

The volume of retail sales in Scotland fell in the fourth quarter of last year but their value rose.

The trends were the result of price deflation, but the Scottish performance was weaker than the volume and value of retail sales in the whole of Britain.

The retail sales index is an important measurement of economic performance and the strength of consumer spending.

There was a 0.5% fall in volume (quantity) in Scotland but a 1.2% rise across Great Britain according to figures adjusted for inflation.

The value of sales by retailers in Scotland in the period from October to December 2016 grew by 0.3% but grew by 1.9% for Britain according to seasonally adjusted figures.

The figures from Scotland’s Chief Statistician are for goods sold by large and small retailers.

David Lonsdale, director of the Scottish Retail Consortium, said: “These figures broadly mirror the findings of our own surveys which noted a more positive trading environment for Scottish retailers in the final quarter of last year.

“Shopkeepers witnessed a second successive quarter of growth in retail sales values in Scotland, albeit the pace eased compared to last autumn.

“These figures are welcome at a time when retailers are continuing to grapple with changing shopping habits and with predictions of choppier times ahead for consumer spending, with inflation set to pick up in earnest over this year and act as a drag on consumer spending.

With the Scottish Government’s Budget being voted on at Holyrood, it’s crucial parliamentarians focus on the priority of growing the economy.

“With household finances already facing rising inflation and higher council tax bills, it’s vital consumers don’t face a further hit to their wallet or purse through across-the-board rises in income tax rates. A 1p increase across the three existing income tax rates would remove £475 million from consumers’ pockets, equivalent to almost 2% of total retail sales in Scotland.”

Shop prices fell in Britain last month because of deflation, but there were warnings that cost pressures would reverse the trend.

Sales volume fell but value rose in Scotland in the last quarter.