Alarm bells not tills ringing as Scotland’s retailers suffer fifth month of falling sales ahead of Xmas

The Scottish Retail Consortium’s latest sales monitor also flags the possibility of substantial January sales.

Alarm bells not tills are ringing for Scotland’s retailers in the final countdown to Christmas after sales slipped for the fifth month in a row.

Industry leaders said Black Friday had been a “damp squib” for many stores as new figures showed that total sales by value fell 1.2 per cent in November, once adjusted for the effects of inflation, compared with the same month last year. It means that retail sales north of the Border have now fallen for five months in a row, measured in real terms.

The latest sales monitor from the Scottish Retail Consortium provides a reality check as the clock ticks down to Christmas Day. Retailers rely on the so-called “golden quarter” covering the build-up to the festive season and post-festive sales to generate the bulk of their profits.

For many retailers, November proved to be something of a sales washout Picture: David Mirzoeff/PA Wire

Ewan MacDonald-Russell, deputy head of the Scottish Retail Consortium (SRC), said the figures would be of concern for “hard-pressed” retailers who are already facing large increases in wage costs in the new year.

“Black Friday sales were a damp squib for Scotland’s retailers as sales fell in real terms in November,” he said. “Adjusted for inflation retail sales fell by 1.2 per cent, the fifth successive month of declining performance, including the first two months of the golden trading quarter. These figures are concerning for hard-pressed retailers many of whom desperately need a good last quarter of 2023 to get them through the traditionally fallow months at the start of next year.”

He added: “If the Scottish Government doesn’t take action in its upcoming Budget to meaningfully blunt a rise in business rates then shops will very likely have to make very difficult decisions in 2024 to balance the books.”

Total food sales rose by 5.8 per cent last month, versus November 2022, but this was below the three-month-average as reduced levels of inflation start to feed through to consumers. The SRC said cosmetics and fragrances performed “reasonably well” because of early discounting, with “perennial favourite” beauty advent calendars proving popular.

However, shoppers continued to shy away from larger purchases, with the report noting that many people were holding back their festive gift spending, either hoping for further discounts ahead of Christmas itself or just cutting back in the face of the continued cost-of-living squeeze. Total non-food sales were up by just 0.9 per cent, year on year, in November. Adjusted for the estimated effect of online trading, overall non-food sales decreased by 0.2 per cent.

Paul Martin, partner and UK head of retail at KPMG, which helps to produce the monthly sales monitor, said: “We are likely to see a prolonged and strategically targeted period of discounting as retailers vie for a diminishing pool of consumer spending and aim to clear their stock. The prospect of excess stock remaining unsold before Christmas raises the possibility of substantial January sales, potentially exerting even more pressure on already tight profit margins.”

He added: “Looking ahead to the early months of 2024, the challenges are expected to persist, posing a threat to the sector and potentially leading to more casualties.”