Retailers face '˜nerve-racking' time as sales hit 21-month low

Retailers face a 'nerve-­racking' run-up to the festive season after November sales were the worst for 21 months, according to a new report.

Discounting is not as successful in attracting people to high street shops. Picture: Lisa Ferguson

Total sales in Scotland last month decreased 1.6 per cent compared with November 2017, when they fell 0.6 per cent, the SRC-KPMG Scottish Retail Sales Monitor showed.

This is the deepest decline since February 2017, excluding Easter distortions, and below both the three-month and 12-month averages of -0.2 per cent and 0.5 per cent respectively, the report said.

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Adjusted for inflation, measured at 0.1 per cent by the 
BRC-Nielsen Shop Price Index, November sales decreased 
1.7 per cent.

Meanwhile, like-for-like sales dropped 2.1 per cent compared with November 2017, when they fell 1.3 per cent. This is below the three-month average of -0.9 per cent.

Scottish Retail Consortium (SRC) director David Lonsdale said: “Retail sales in November recorded their poorest performance for 21 months, with pretty dire results for items deemed less essential dragging overall retail sales into negative territory.

“Grocery sales grew but at a less pronounced pace than witnessed during the summer and early autumn.

“The gulf between food and non-food categories became starker, with the latter sinking markedly – to a 20-year low – despite Black Friday ­discounting and the proximity to Christmas.

“Food, gaming, mobile phone and associated accessories fared reasonably well, however, toys, beauty products, clothing, footwear and smaller domestic appliances struggled.

“Retailers now face a nerve-racking few weeks leading up to the crucial festive season, after what has been a bruising year for many.”

The report found total food sales in November increased 2.8 per cent compared with November 2017, when they had jumped 4.2 per cent.

This is below both the three-month average of 3.0 per cent and the 12-month average of 3.9 per cent.

Total non-food sales decreased 5 per cent in November compared with November 2017, when they fell 4.4 per cent.

This is worse than the three-month and 12-month averages of -2.7 per cent and -2.2 per cent respectively.

Adjusted for the estimated effect of online sales, total non-food sales decreased 4.1 per cent in November versus November 2017, when they dropped 2.6 per cent.

The figures cover the four weeks from 28 October to 
24 November.

Paul Martin, UK head of retail at KPMG, said: “Black Friday sales were disappointing, with total sales in Scotland falling 2.1 per cent on a like-for-like basis compared to November last year.

“As we’ve come to expect, online shopping took precedence over the high street, with consumers preferring to browse and purchase items from the comfort of their homes.”

He added: “Although these figures don’t take into account the full Black Friday weekend, which includes Cyber Monday, it’s clear to see heavy ­discounting isn’t as successful as it once was in attracting ­customers to the high street.

“Against a backdrop of deep discounting, sales growth and profitability don’t necessarily go hand-in-hand and retailers will need to keep a tight focus on margins over the Christmas season.”