Scots retailers boosted by 4.3% rise in festive sales

Retail sales north of the Border increased 4.3 per cent in December, providing a boost for businesses over the vital Christmas period.

Sales grew at their fastest pace in almost three years, but experts warned over the impact of rising inflation. Picture: Jon Savage

Data from the Scottish Retail Consortium (SRC) trade body and accountant KPMG revealed strong sales over the month, compared to a drop of 0.4 per cent a year earlier.

The figures, which cover the five-week period from 27 November to 31 December, also showed total Scottish sales increased 0.7 per cent compared with December 2015, when they declined 0.2 per cent. Analysts said it was the strongest rise since January 2014.

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Food retailers also recorded a sales increase of 2.5 per cent on December 2015. This performance was the best since October 2013.

Total non-food sales, however, declined 0.7 per cent compared to a year earlier, when they fell 1.2 per cent.

Ewan MacDonald-Russell, head of policy and external affairs at the SRC, said: “A strong last week before Christmas led to the strongest rise in Scottish sales since January 2014. Adjusted for deflation, total sales rose by 2.1 per cent.

“It’s encouraging to see another good month’s performance, which builds on a good November, and continues the autumn trend of a small but now sustained recovery in retail sales.”

Although Christmas provided a boost for Scottish retailers, analysts warned there could be trouble ahead as economic indicators suggest inflation is affecting costs for businesses.

They also said inflation is beginning to feed through to the high street and both customers and retailers are likely to feel the squeeze over the early months of 2017.

Craig Cavin, head of retail in Scotland at KPMG, said there was a significant increase in both online and high street sales in December, but uncertainty over Brexit could result in rises in food prices.

He said: “Christmas feasts were the order of the month, with total food sales up 2.5 per cent in December. With price increases likely over the coming year, consumers were happy to make the most of the festive discounts.

“Strong Christmas sales will give retailers much-needed hope as they prepare for the coming months, when they will have to face up to the possibility of rising food prices and the ongoing uncertainty around Brexit.”