Sales figures showing optimism for Scots shops

SCOTTISH high street sales last month grew at their quickest pace since January, figures today revealed, although the rise came only after continuing deflation was taken into account.

Retail sales at Scottish stores increased last month at their quickest pace since January. Picture: Getty
Retail sales at Scottish stores increased last month at their quickest pace since January. Picture: Getty

The latest Scottish Retail Consortium (SRC)/KPMG numbers came as the SRC’s boss echoed calls by sector chiefs south of the Border who took out a national newspaper advert to urge reform of business rates.

David Lonsdale, director of the lobby group, said: “As I visit retailers across Scotland one message is consistently to the fore – their confidence to invest going forward is being held back by the prospect of shelling out even more for business rates.”

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His comments came as the future of Phones4u and its 5,600 employees – including 292 across 45 stores in Scotland – continued to hang in the balance as founder John Caudwell blamed “extremely callous” mobile networks for the collapse of the company, a description they strongly refuted.

Total Scottish retail sales increased by 1.3 per cent during August, although without taking shop price deflation into account they fell by 0.3 per cent compared with August 2013. Like-for-like sales decreased by 1.7 per cent

Food sales were 1.8 per cent down on August last year but non-food sales increased by 0.9 per cent.

Adjusted for the estimated effect of online sales in Scotland, total non-food sales would have increased by 2.8 
per cent, the strongest growth since 
January, excluding Easter distortions.

Clothing and footwear was the best-performing non-food category, with the new autumn ranges already 
proving popular with shoppers. But Lonsdale said that, in contrast, the grocery market remains “particularly tough for retailers”.

He said: “Food price inflation is at a record low, and whilst the intense competition in the grocery sector brings benefits to Scottish consumers in terms of keen prices, it can be a challenging environment for the firms involved. Looking forward, retailers will be buoyed by recent more positive forecasts for employment, unemployment and wages. However, the crucial factor will be when this will translate into higher levels of confidence and more transactions.”

David McCorquodale, head of retail at KPMG, added: “Whilst the competitive grocery market continues to drag down the sector’s performance as a whole, the gap between the decline in Scotland and that in the rest of the 
UK has narrowed again, indicating that this is a country-wide matter rather than a reflection on regional tastes or trends.”

Meanwhile administrators at PwC were yesterday starting talks on whether any Phones4u stores can re-open.

PwC said it was hopeful that it will be able to pay all the outstanding wage arrears but this was dependent on accessing funds to pay for the running costs of the business.

Rob Hunt, joint administrator, said: “Our initial focus will be to quickly engage with parties who may be interested in acquiring all or part of the business, and to better understand the financial position and options for the company.

“The stores will remain closed while we have these conversations.

“We will also be talking to network operators and suppliers, and trying to access funds to pay for the costs of the business, including wages.”