Retail Sales Down 1.2% Last Month

19 November 2014, 06:04

High street retailers had a "difficult'' month in October, a report has found.

Total Scottish sales fell by 1.2% last month, compared with the same point last year.

Clothing and footwear sales were "sluggish'' during the month, with fluctuating weather conditions hampering shoppers' demand for promotional items.

Food and drink sales also continued to wilt, despite a positive demand for Halloween-related goods such as confectionery and pumpkins.

Nevertheless, gaming and beauty products did well and online retail pushed sales in the non-food category to their second highest growth of the past six months.

The analysis was contained in the latest SRC-KPMG Scottish Retail Sales Monitor.

It found that total food sales were 2.7% down on October 2013, when they had increased by 3%.

Total non-food sales were flat compared to the previous year.

Adjusted for the estimated effect of online sales in Scotland, total non-food sales would have increased by just over 2%.

Like-for-like sales, which strip out factors such as new store openings, were down 2.7% last month across all categories compared with 12 months ago. But, when adjusted for deflation, October sales increased by 0.6% in real terms.

Looking in more detail at certain areas, the study found clothing and footwear was the worst performing category in October for the second consecutive month. Despite that, the year-on-year growth recorded an improvement over the previous month.

Retailers told the report's authors that lightweight clothing outperformed heavier items due to the unseasonably warm weather which continued into October. Footwear sales followed a similar trend to clothing, with the sale of boots continuing to feel the effect of the mild weather.

On a more positive note, gaming continued to drive the growth of the electricals sector, while health and beauty items had an encouraging performance ahead of the run-up to Christmas.

David Lonsdale, director of the Scottish Retail Consortium (SRC), said that while the total value of retail sales in Scotland edged down in October, it was at a more modest rate than September's drop of 2.9%.

He said: "Looking forward, retailers will be heartened by the news that growth in average pay is now outstripping inflation for the first time in five years. Shopkeepers will be hoping that this - alongside sustained rises in footfall over recent months - translates into greater levels of confidence and transactions as we approach the important Christmas trading period.''

David McCorquodale, head of retail at KPMG, said: "October was a difficult month for Scottish high street retailers, particularly for those selling heavy coats and boots. Wet and wild at the start, the month ended with a hot Halloween - neither the best conditions for a positive consumer reaction to the promotions on offer. The winners were the games sellers and home accessory retailers, where weather plays less of a role.

"Fashion and footwear retailers, who started the year so well, will be concerned with the higher stock levels they are holding now but will do their best to hold their nerve to drive volumes and margins in the six-week lead-up to Christmas. The food retailers continued the negative trends that have been such a feature of the year to date and will be disappointed to feel the gap widening against the rest of the UK for the last three months rolling.

"With six weeks to go and festive adverts on our screens, the annual dance between retailer and consumer has begun.  Significant investment has been made across the channels during the year and 'tis now the season to put them to the test.''

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