Scots non-food sales fall 5.4% in worst results for a decade

Published on Tuesday 20 January 2009 20:56

SCOTLAND'S high street stores have suffered their worst monthly fall in non-food sales since 1999, according to figures published today.

Overall sales in December were 0.8 per cent higher than in December 2007, and total sales were up by 3.4 per cent, according to the Scottish Retail Consortium's (SRC) monthly update.

But when food sales were stripped out of the equation, sales were down 5.4 per cent on a like-for-like basis.

And they were down by 4 per cent even when new stores were put into the calculation.

The survey came as accountancy firm Grant Thornton claimed that the festive season was not as grim for UK retailers as many analysts had feared.

But the SRC report said that December's tiny like-for-like increase was mainly driven by food sales, discounts and clearance sales.

Fiona Moriarty, director of the consortium, said: "December was a tale of two halves.

"The first half of the month was extremely slow then it took heavy discounts to drive sales immediately before and immediately after Christmas.

"Food retailing was more resilient, though strong sales were against a very weak December in the previous year. Huge price cuts couldn't stop the worst fall in non-food sales since 1999."

She added: "With mounting fears about jobs and plummeting consumer confidence these figures provide little reassurance about Scottish retailers' prospects for 2009."

But despite the Scottish gloom, the 0.8 per cent overall increase in like-for-like sales contrasts with a 3.3 per cent decline for the UK as a whole.

The consortium said

the figures obscured a major difference between food and non-food sales.

While the food sector had a "very solid" Christmas, non-food saw sales well below last Christmas despite heavy promotion.

The SRC said some of the fall in the value of sales was because of discounts, but the sharp fall in non-food sales suggested that volumes fell as well.

It added: "The result will have generated considerable pressure on margins for those firms that were forced into discounts in an unplanned way.

"The difficulties were evident across the sector but least pronounced in clothing and footwear where sales were only slightly below last December. This was a smaller decline than in recent months."

On a more upbeat note, the Grant Thornton report said 41 per cent of UK retailers surveyed had reported an increase in like-for-like sales over the Christmas period.

The Review of Retail Christmas trading updates showed that the entertainment sector, which includes computer games, books, and CDs, reported the highest average like-for-like sales increase at 3.7 per cent. Homewares saw the biggest drop in like for like sales at 11.3 per cent. The survey follows the analysis of 37 trading updates issued by UK retailers this month.