Scottish high streets show little sign of bounce-back

HIGH street spending edged up in Scotland last month marking the first rise since March but continue to lag behind stronger recovery being witnessed in the UK as a whole.

The Scottish Retail Consortium (SRC) today said like-for-like retail sales rose by 0.1 per cent in August, compared to a year ago, helped by sunny weather and strong food sales.

But it cautioned that even the slight rise may be a temporary reprieve.

SRC director Fiona Moriarty said: "The longer-term concern for retailers is that consumer confidence is weaker in Scotland than other parts of the UK.

"Many people already feel they have less money available and that that will get worse not better."

She also stressed that the rise follows several "very poor months of trade". The June and July figures had shown year-on-year falls of 1.1 per cent and 1.4 per cent respectively .

"Caution is still the shopping watchword and shoppers are chasing deals and value in a big way and retailers are discounting".

Today's SRC/KPMG Scottish Retail Sales Monitor showed that like-for-like food sales rose by 1.7 per cent, with warmer weather boosting the sector. Drier, sunnier conditions in the second half of the month saw increased sales of salads, barbecue meats, beer and wine.

However, the like-for-like figures for non-food sales showed a drop of 1.4 per cent, with big ticket items and discretionary purchases hit hardest by weak consumer confidence.

Sales of clothing and footwear fell despite back-to-school purchases helping the childrenswear sector.

The weak housing market combined with concern about employment also meant furniture and floorcoverings sales were lower than last August.

Homewares showed a modest improvement over the previous month but takings remained down on a year ago.

Shoppers put off discretionary purchases and concentrated on more practical essentials and replacement items. Sales of TVs slowed further after their World Cup boost and smaller household appliances held up relatively well with computers also boosted by back-to-school and college promotions.

David McCorquodale, head of retail in Scotland for KPMG, said although the overall rise was to be welcomed, the coming months would be a major test of confidence in the sector.

"People remain worried about how they will personally be affected by the soon to be announced public-sector cuts," he noted.

"These are likely to have a more pronounced impact on Scotland than the rest of the UK due to the higher proportion of the population employed in the public sector. Retailers will be anxious to see more positive indicators in the coming weeks as they order stocks in for the Christmas season."

The 1 per cent rise reported by the British Retail Consortium in August compared to growth of 0.5 per cent in July and 1.2 per cent in June.It said job cuts and tax rises were deterring people from making major spending commitments.