Critical period as consumers maintain a tight hold on purse strings

SCOTTISH retailers are entering a “critical” period in the run up to Christmas as data published today shows that food, drink and clothing sales continued to fall during September.

Figures from the Scottish Retail Consortium (SRC) revealed a 0.6 per cent drop in like-for-like sales – which strip out the effect of stores being opened – with unusually warm autumn weather denting demand for hats, gloves and scarves.

Total sales, which include newly-opened stores, edged ahead by 0.8 per cent but, with inflation running at 5.2 per cent in September, sales volumes continued to fall.

SRC director Ian Shearer said: “A slight improvement is better than no improvement but, fundamentally, the tough times continue for many customers and retailers. Generally, people are still confining their spending to basic needs.”

David McCorquodale, head of retail in Scotland at accountancy firm KPMG, which helped compile the SRC survey, warned: “The retail sector now faces a critical period.

“Many promotions and sales days will occur between now and Christmas, but retail chiefs will also be hoping consumers manage to throw a little caution aside in the coming weeks and that the weather does not play as key a role as it did last year.”

The SRC said that, while both like-for-like and total sales were “less bad” than in August, last month’s figures showed that consumer confidence in Scotland remained “very fragile” and continued to show a weaker trend than in the UK as a whole.

Food shoppers who are worried about their household incomes and job prospects continued to look for discounts and special offers, triggering a “slow start” for Christmas items.

But retailers did report the start of a gradual shift towards more autumnal foods, including “ready meals, pies, pizzas and root vegetables”.

“Back to college” items – including smarter shoes, bed linen and tablet computers – were one of the few highlights in September’s sales figures.

Larger ticket items – such as fitted kitchens and bathrooms – continued to suffer, although bed sales were on the rise.

Although Scottish shoppers did not enjoy the “Indian summer” for as long as consumers south of the Border, supermarkets and toiletries shops reported that cough and cold medicines and vitamins supplements were “weaker than usual for the time of year”.