Headwinds batter Scottish high streets despite sales rise

Scotland's high streets eked out some modest growth last month though the result was massaged by the timing of Easter while the retail sector continues to face a 'number of headwinds', experts warned.

Kirkcaldy High Street
Kirkcaldy High Street

Total sales rose by 0.8 per cent last month compared with March 2017, when they had fallen by 2.1 per cent, according to the latest sales monitor from the Scottish Retail Consortium (SRC) and KPMG.

This is above the three-month and 12-month averages of 0.5 per cent, while adjusted for inflation, sales increased by 1.8 per cent.

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The retail sector has been rocked by higher costs, a squeeze on household budgets and the continued migration to online shopping.

SRC director David Lonsdale said that last month’s result was likely to have been distorted by the early timing of Easter this year. He said: “While retail sales grew in March and at first blush seem to have turned in another creditable result, the figures were heavily distorted and flattered by the early Easter and overall last month’s performance will be seen as somewhat underwhelming.

“Grocery sales once again were the bright spot, bolstered by celebrations associated with Easter and Mother’s Day. The ‘Beast from the East’ weather phenomenon at the start of March had little impact on food sales over the trading period as a whole.

“The same cannot be said for non-food retail sales, with the ‘Beast’ preventing shoppers from reaching stores in the early part of March, and so this more discretionary part of retail spending struggled once again.

“Retailers will now look nervously towards April as they calibrate their efforts to tempt shoppers,” he added.

“The underlying weakness in consumer spending persists and household disposable incomes face a number of headwinds, with higher council tax bills landing on doormats and with increased pension contributions for some trebling.”

Craig Cavin, head of retail in Scotland for KPMG, added: “It hasn’t been a positive start to the year for retailers and it is unlikely that trading conditions will drastically improve any time soon.

“Retailers will need to remain agile and make themselves stand out from the crowd. They’ll also need to strengthen their online offering if they are to succeed in this challenging climate.”

l The owner of budget fashion chain Primark has seen UK sales growth slow as it became the latest retailer to reveal a weather hit.

Associated British Foods said Primark’s UK like-for-like sales rose 3 per cent in the six months to 3 March – down from 5 per cent growth seen in the previous year.

It said trading was impacted by an unusually warm October and the Beast from the East in the final week of its first half. But AB Foods said the UK performance was “remarkable” amid difficult conditions.