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Tidings of discomfort and woe on Scotland’s high streets as figures show slump in sales

New figures showed a dramatic slump in pre-Christmas shop sales

New figures showed a dramatic slump in pre-Christmas shop sales

  • by TOM PETERKIN
 

SCOTLAND’S beleaguered high street retailers have had their hopes of a pre-Christmas boost dashed as new figures showed a dramatic slump in shop sales.

The latest report from the Scottish Retail Consortium (SRC), published today, indicates that hard-pressed Scottish consumers have delayed their Christmas shopping, contributing to disappointing sales that have fallen behind those elsewhere in the UK.

The gloomy picture was revealed in the survey by SRC and KPMG, which compared last month’s sales with those recorded in November 2011.

The figures showed that like-for-like sales, which strip out factors like new stores opening, were down 2.2 per cent last month when compared with November last year. A similar pattern was observed when total sales were compared over the same period, with a 1.2 per cent drop over the year.

In contrast with the decline experienced north of the Border, like-for-like sales in the UK grew slightly over the same period at 0.4 per cent, and UK total sales were higher still at 1.8 per cent.

Last night politicians demanded action from the Scottish and UK governments.

According to the SRC, consumers’ fears about the ailing Scottish economy accounted for Scotland’s relatively poor performance compared with the UK as a whole. Poor weather in November also contributed to the disappointing figures in Scotland, which suggested that consumers are putting off Christmas shopping in the hope that they might pick up some bargains closer to 25 December.

The survey revealed that like-for-like non-food sales fell by 
5.2 per cent since this time last year. Like-for-like food sales did grow by 1 per cent, but that translated into a real-terms loss when inflation was taken into account.

SRS director Fiona Moriarty said the increasing sales normally expected in November as people prepare for Christmas had failed to materialise. “These underwhelming figures, which scarcely improve on October, mark the closing stages of what has been a challenging year for retailers in Scotland.

“Consumer confidence is stronger, but this has yet to kick-start sales growth. People are waiting for attractive promotions and discounts before they make a purchase and holding back on spending too much too soon so that they can be sure of covering the cost of Christmas.

“The wet and cold weather also deterred Scottish shoppers in November. It’s one of the main factors which resulted in clothing and footwear posting its worst performance since January, excluding April, which was hit by this year’s earlier Easter.

“While there’s not much cause for cheer in November’s figures, retailers have been reporting increased sales in recent weeks, suggesting that the public mood is shifting as the festive season approaches.”

She added: “With Christmas falling on a Tuesday, many may sense that having a full shopping weekend two days before Christmas gives them more time to round off their buying.”

The SRC said the fact that half term fell during November south of the Border contributed to a better month in the rest of the UK. However that did not fully explain why Scotland continued to lag behind the rest of the UK.

Ms Moriarty said: “Consumer confidence has been lower in Scotland than anywhere else in the UK. The situation appears more serious in terms of job security and in terms of the economy over all; therefore, people are more reluctant to spend.”

David McCorquodale, head of retail for KPMG, said: “The Chancellor’s autumn statement last week warned of little growth in the year ahead and it will take a while for consumers to feel secure enough to open their wallets and spend again.

“Rather than spread the cost of Christmas, it appears the consumer is waiting for last-minute promotions. The danger is that many may simply choose to reduce the number of presents they give this Christmas rather than incur further expense.

“For retailers, the next two weeks are critical for margins and cash flows and they will not want to be left at the end of the year holding unwanted stock. To discount, or not to discount before Christmas is the real question.”

Opposition politicians demanded that the UK and Scottish governments take action to reverse the decline. Labour’s finance spokesman Ken Macintosh said: “These figures show yet again that Scotland is caught between two governments with the wrong priorities.

“The UK government is cutting too far and too fast and 
the SNP in Edinburgh have failed to act, cutting capital spend in vital areas which could have kick-started the economy and has sent millions of pounds abroad with a failed procurement policy.”

Mr Macintosh added: “Scotland needs the SNP to change course and change course quickly. We need to stimulate our economy, get our young people into work and give contracts to companies which keep their money in Scotland.”

Scottish Conservative finance spokesman Gavin Brown said: “It has been clear for some time that retailers are having an extremely difficult time in this economic climate.

“That is why the Scottish Government should be doing everything it can to help businesses, not laying down obstacles such as the retail levy.

“Industry in Scotland needs the SNP to start doing positive things for economic growth.”

A Scottish Government spokeswoman said it was “doing all it can to strengthen the retail sector. Our latest Retail Sales Index shows that the retail sales performance over the year continues to show growth in Scotland, with volume growth of 
0.9 per cent in the third quarter of 2012, compared to 0.7 per cent for GB as a whole.

“As our draft Budget demonstrated, we are taking action to boost growth with a tax relief package worth over £500 million this year, offering the most supportive business environment in the UK and reducing or removing business rates for three in five business premises across Scotland.”

 

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