MIXED signals over the health of the retail sector have emerged after new figures showed the number of shoppers on Scotland’s high streets has continued to fall, but department store John Lewis enjoyed its best weekly performance of the year.
The Scottish Retail Consortium (SRC) also said today that the number of shops lying empty in the country’s town centres has reached its highest level in more than two years, giving “cause for concern” ahead of the key Christmas season.
SRC director Fiona Moriarty, pictured right, said footfall dropped by 2.7 per cent in October, mirroring the previous month’s decline, while the proportion of vacant shops grew to 11.1 per cent, up from 10.1 per cent in July.
She added: “The fact that Scottish vacancies have reached their highest rate since July 2011 is a cause for concern, especially this close to Christmas. The empty shops rate is now in line with the UK average, and indicates that there’s work ahead to ensure that our town centres can continue to be viable places to trade and spend time.”
The retail sector has witnessed a number of high-profile casualties amid tough competition from supermarkets and online retailers. Last week shoe chain Barratts and video rental business Blockbuster fell into administration, joining a growing list of names that includes Comet, Jessops and JJB Sports.
However, John Lewis said yesterday that it had notched weekly sales of more than £100 million for the first time this year, boosted by a 23.7 per cent jump in sales over the internet. The employee-owned retailer said last week’s takings of £101.4m were 10.7 per cent higher than the same period last year, “thanks in part to the onset of some colder weather”.
Howard Archer, chief UK economist at IHS Global Insight, said: “This is a very encouraging performance that lifts hopes that consumers are starting to step up their spending for Christmas having apparently taken a breather in their expenditure in October following robust spending over the summer.”
According to the Office for National Statistics, sales volumes fell by 0.7 per cent last month, adding to pressure on retailers to deliver a bumper festive performance. But the wider economy is returning to health and the Bank of Scotland’s latest jobs report, published today, shows that demand and salaries for permanent staff is growing.
Chief economist Donald Macrae said the bank’s “labour market barometer” is back above pre-recession levels, leading to a “marked deterioration” in the number of available job candidates.
The UK economy expanded by 0.8 per cent in the third quarter, and the Bank of England last week raised its growth forecasts for the full year to 1.6 per cent, up from its previous 1.4 per cent prediction.