High street hope as festive food flurry buoys stores

Scotland's retailers have been given some welcome cheer after putting in the strongest performance in two years thanks to healthy festive food sales.

Festive food sales kept the tills ringing last month. Picture: Phil Wilkinson

The latest sales monitor from the Scottish Retail Consortium (SRC) and KPMG – published today – shows that total takings dipped 0.2 per cent last month compared with December 2014, when they had declined by 1.8 per cent.

It marks the best performance since January 2014, excluding Easter distortions. After stripping out the effects of price deflation, sales volumes were actually higher, year-on-year, by 1.8 per cent.

Industry leaders noted that the sales performance peaked significantly in the week containing Christmas day, highlighting the impact of demand during the critical festive period.

David Lonsdale, director of the SRC, said the upbeat result for December provided “a final flourish” to what was otherwise a “tepid” year for retail sales in Scotland.

He said: “Once adjusted for falling shop prices total retail sales increased by a commendable 1.8 per cent last month, the best performance in almost two years.

“This was largely driven by purchases of festive food and drink in the run up to Christmas, although non-food categories continued to gather momentum most notably online.

“Grocery sales recorded their best monthly performance in over two years, while non-food categories such as home accessories, electrical goods and beauty products also did better. By contrast clothing and footwear sales in December returned its weakest performance for four months.”

A number of major high street names, including Next, Sports Direct and Marks & Spencer, have noted in recent days that clothing sales were impacted by the mild weather during November and December.

David McCorquodale, head of retail at KPMG, said: “A grocery-led festive season provided a year-end boost for Scotland’s rain-swept high streets to provide cheer and optimism for the year ahead.

“After months in the doldrums, the food and drink sector provided the surprise package over Christmas in Scotland, returning to growth as consumers loosened their belts and treated themselves to a festive feast.

“Heavy rain and flooding meant shoppers took to the keyboard rather than the high street and unseasonably warm weather led to the fashion sector suffering a bit of a wash out, ending the year on a wave of discounts and online returns.”

On the food front, total sales rose by 1.1 per cent, the best performance since November 2013, excluding Easter distortions, and the first time in nine months that the food category has reported growth.

Adjusted for food deflation, total food sales increased by 1.4 per cent to reach their highest growth rate since July 2013.