Scottish retail sales lag pre-pandemic levels despite St Valentine’s Day and office return boost

Scottish retail sales still lag pre-pandemic levels despite a modest rebound in the high street’s fortunes last month, industry figures today reveal.

Total sales north of the Border fell by 6.3 per cent in February, compared with the same month two years earlier in 2020, just ahead of the first lockdown, when they had decreased by 0.8 per cent.

Sales had fallen by a sharper 7.9 per cent in January, on the same two-year comparison.

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David Lonsdale, director at the Scottish Retail Consortium (SRC), which produces the monthly sales monitor together with KPMG, said: “February saw a further incremental improvement in Scottish retail sales, helped in part by purchases associated with St Valentine’s Day and a slight uptick in people returning to workplaces. However, retail sales still lag behind the comparable period prior to the pandemic, underlining the prolonged nature of the retail recovery.

Shoppers hit the streets in Glasgow. Picture: Jane Barlow

“The polarisation between food and non-food continues. Food and drink sales continued to perform well, albeit buoyed somewhat by food price inflation.

“However, fashion and footwear as a whole was sluggish, held back by continuing challenges with securing timely supplies of stock from abroad which affected seasonal ranges.”

Total food sales rose by 3.5 per cent, compared with February 2020, when they had increased by 2.9 per cent.

On the flip side, total non-food sales slumped 14.5 per cent in February compared with two years earlier. Adjusted for the estimated effect of online sales, total non-food sales were down by 34.1 per cent last month, versus February 2020.

Lonsdale added: “There is no shortage of storm clouds facing the industry at the moment and the outlook remains uncertain. Retailers continue to face difficult trading conditions due to supply chain challenges and weak demand, with rising inflation across the economy likely to crimp consumers’ spirits and their propensity to spend.

“This is set to be compounded by rising public policy costs over the coming weeks notably the reinstatement of business rates and the hike in employers’ national insurance contributions from the start of April.

“Policy makers can ease the strain over the coming months by keeping a tight lid on those costs under their control including taxes and regulation.”

The report noted that larger furniture items had sold well last month, often on the back of deals offering interest-free finance.

Beauty products and office-wear sales got a lift as more people started to return to the office.

Paul Martin, partner and UK head of retail at Big Four accountancy firm KPMG, said: “Scottish retail sales remained sluggish in February, remaining some way off pre-pandemic levels of spending.

“A double whammy of rising inflation and supply chain issues continues to impact both shoppers and retailers alike, with many consumers choosing to cut spending in order to manage increasing household bills,” he added.

“Scottish retailers also face tough inflationary pressures and will have to make challenging decisions around how to manage supply chains, absorb higher costs, or pass them on without losing custom.”

The SRC sales figures are not adjusted for inflation.

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