High street stages a mini fightback but discounts cost stores dear

But retail chiefs remain concerned about the broader picture after a slump in the months building up to Christmas and the prospect of consumers tightening their belts in the year ahead.

The sales boost in Scotland came after beleaguered high street stores offered discounts of up to 80 per cent and extended opening hours in an effort to recover from the worst pre-Christmas sales slump on record.

Sarah Cordey of the Scottish Retail Consortium said: “It took a long time for consumers to get into Christmas. October and November were extremely slow, but there was a pleasing pick-up in business in the last week before Christmas which was very good and very encouraging.”

But she said that a lot of that business was done through discounts which puts a “major squeeze” on retailers’ profits.

Official data for the fourth quarter of 2011 showed that the volume of retail sales in Scotland was up 0.7 per cent on the previous three months and up 0.7 per cent over the previous 12 months.

The value of sales rose by 0.8 per cent from the third quarter of 2011, and was 3.5 per cent higher over the year.

That means that over the past 12 months, sales growth has been better in Scotland than across Britain, where the volume of sales increased by 0.3 per cent and the value grew by 3.4 per cent.

However, over the last quarter, sales in Scotland did not grow as strongly as in Britain where sales volumes were up 0.9 per cent in the fourth quarter with the value rising by 1.3 per cent.

Ms Cordey added: “We remain concerned that the level of retail growth is behind the inflation rate, which indicates that consumers are buying fewer items. There was a good boost over the Christmas period, but the underlying conditions consumers are dealing with have not changed. There is still an awful lot of consumer caution and confidence lags behind the UK as a whole.”

She is concerned that the new year will see a “new tightening of belts” by shoppers after this eased up over Christmas.

Finance secretary John Swinney said: “The Scottish sector is outperforming Great Britain according to the annual statistics, and this underlines the importance of the measures we are taking to enhance economic and consumer confidence.”

Mr Swinney said the UK government must “do more to support the fragile recovery”.

But Tory finance spokesman Gavin Brown called on Mr Swinney to rethink plans for a £110 million tax on supermarkets.

“It is now imperative that the Scottish Government uses the powers it already has to help the sector and even more vital that they don’t bring in a Scotland-only levy that will have a detrimental impact on jobs,” Mr Brown said.