Christmas loses its sparkle for retailers in Scotland

The Scottish Retail Consortium has bemoaned the worst Christmas in 20 years. Picture: John Devlin
The Scottish Retail Consortium has bemoaned the worst Christmas in 20 years. Picture: John Devlin
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It was a show of seasonal parsimony that would have warmed old Scrooge’s heart, with threadbare trees made to last another year and the dust blown off baubles that had long ago lost their lustre.

But Scotland’s retailers have been left bemoaning the lack of festive cheer among consumers after enduring their bleakest Christmas period since records began two decades ago.

An analysis by the trade association for the nation’s retail outlets has warned the sector will continue to face challenges over the course of 2019 while recovering from what it described as the “worst real terms December sales figures in 20 years”.

Sales fell 1.2 per cent in December compared to the previous year, when they increased by 0.3 per cent. After being adjusted for inflation, it marks the lowest sales level since the Scottish Retail Sales Monitor began in 1999.

While Christmas is ordinarily a time of year when retailers rejoice as shoppers let loose their purse strings to fill up their fridges and cupboards and buy presents, the Scottish Retail Consortium (SRC) said the squeeze on household finances and continuing political and economic uncertainty encouraged people to take a more prudent approach.

Total sales across the country were down a percentage point compared to a 0.8 per cent rise in the previous year, making it the worst December outcome since 2014.

The SRC pointed out while food sales enjoyed a modest growth of 1.3 per cent, that was the smallest increase since February 2017.

Total non-food sales fell by 2.8 per cent compared to December 2017, when there was a more modest drop of 2.2 per cent.

One of the main reasons attributed to the decline in non-food sales was the weak performance of Christmas decorations as consumers chose to reuse older baubles rather than splash out on new items.

Ewan MacDonald-Russell, head of policy and external affairs at the consortium, conceded “there was little Christmas cheer for retailers” in light of the results.

He said: “Whilst the dip was less pronounced than that witnessed the previous month, it’s clear stores have suffered as consumer spending is pared back under pressure from inflation, rising household costs and against a backdrop of uncertainty.

“Christmas is the key trading period for retailers, so these figures bookend an underwhelming 2018 for the industry.

“Nonetheless, despite the gloom retail sales actually grew by 0.3 per cent last year, in line with recent Scottish GDP figures.”

He added: “What should concern policymakers more is sluggish retail sales can be a warning light for the wider Scottish economy.

“With political and economic uncertainty likely to continue, there may continue to be challenges ahead in 2019.”

Paul Martin, UK head of retail at KPMG, said: “Retailers were generous with discounts and other promotional offers throughout the month, but this wasn’t enough to encourage shoppers to the high street.

“The contrast in performance between the high street and online was plain to see in December, even though 2018 saw a slowdown in online retail sales.

“2018 has been an extremely tough year for retailers and as we enter 2019, the focus should be on remaining resilient in the face of both known and unknown factors.”