DCSIMG

Subdued high street indicates fragility of recovery

SRC said statistics from the High Street illustrated how fragile the economic recovery is. Picture: Robert Perry

SRC said statistics from the High Street illustrated how fragile the economic recovery is. Picture: Robert Perry

  • by TOM PETERKIN
 

High street retailers had a “more subdued” September, with the latest figures showing a smaller increase in sales than in recent months.

Total sales were up by 1.8 per cent on September last year, compared with rises of four per cent and 3.5 per cent in July and August respectively.

The figures published today by the Scottish Retail Consortium (SRC) KPMG retail sales monitor also showed that sales growth in Scotland was weaker than that across the UK as whole, where sales rose 2.4 per cent last month.

The SRC said the statistics from the High Street illustrated just how fragile the economic recovery is and suggested that consumers were holding back on spending in the run-up to Christmas.

When like-for-like sales were considered for last month, they were down 0.8 per cent on last September. SRC director Fiona Moriarty said: “After a strong summer these more subdued figures serve as a reminder that while recent months have seen some shafts of light, the path to economic recovery remains 
fragile.

“While Scottish consumer confidence remained fairly stable in September, many of us are still cautious and may be holding back on spending until Christmas gets closer.

“This is certainly a slowdown after an impressive run during the summer months.”

Food sales north of the Border were up 2.3 per cent on September last year but like-for-like sales were down 1.3 per cent.

Non-food sales were up 1.4 per cent, but a similar pattern was observed when like-for-like non-food sales were considered.

While sales growth was weaker than in recent months, retail chiefs said the three-month average of 3.1 per cent growth is still well ahead of the 12-month average of 1.2 per cent.

Footwear and clothing sales declined, with shoppers holding back on buying new autumn ranges in the stores. But sales of furniture and floor coverings did better as pick-up in demand for so-called big ticket items such as fitted kitchens continued, probably helped by a more buoyant housing market.

September also saw strong demand for tablets, games and other electronic gadgets.

David McCorquodale, head of retail at KPMG, said: “Every recovery suffers some form of setback and September’s sales figures in Scotland provide just that.”

Fergus Ewing, minister for energy enterprise and tourism, said: “Following a summer of strong retail sales today’s Scottish Retail Consortium figures suggest a small dip in consumer confidence during September. This indicates that while the recovery embeds, consumers may be exercising some caution in their spending.”

Leigh Sparks: Retailers must get used to fluctuations in volatile climate

AS THE economic recession really began to bite in 2009, the Scottish Retail Sales Monitor showed for the first time in almost a decade that Scotland was underperforming the UK. This underperformance continued until this summer.

Over the heady summer of 2013 Scottish retail sales had something of a bumper time, clawing back the ground on UK sales. Total sales in particular matched the UK.

But these September figures rather take the gloss off the recent run of good numbers for Scotland. Whilst the three- month average for Scotland is pretty close to the UK, the September figures themselves are a bit of an antidote to the summer heights.

Like-for-like sales are down pretty much across the board, whilst in total sales, food held up a little better than non-food. Clothing and footwear in particular suffered. The data also show a decline in consumer confidence in Scotland in September but a rise in the UK as a whole.

So September saw a sharp adjustment in performance in Scotland allied to a loss of confidence. It is hard to see a single factor that accounts for this, and it may be simply the summer sun saw attitudes and sales rise sharply; the darker days of autumn are the correction to this.

Retailers will be a little concerned that this is a real brake on Scotland. Yet, the figures may also be telling us nothing more than that the recovery is very fragile, especially outside London, and that we can expect more of these variations in performance from month to month. Certainly there is little sign of sustained strong recovery in Scotland, so fluctuations may be the order for some time, especially if confidence continues to be so volatile.

Failure to spot the trends and manage accordingly will cause real difficulties, exacerbated by the need to have a strong sales performance in the run up to and through Christmas and the New Year.

• Leigh Sparks is professor of retail studies at the University of Stirling

 

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