Shopkeepers suffer biggest drop in sales since January

Shoppers on Edinburgh's Princes Street. Picture: Toby Williams
Shoppers on Edinburgh's Princes Street. Picture: Toby Williams
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SHOPKEEPERS endured another difficult period last month with Scottish retail sales declining by 1.3 per cent, compared with 
October last year.

The fall experienced in October 2012 was the biggest drop since January this year, if a statistical blip, which caused an unseasonally poor figure for April to be recorded because of the timing of the Easter weekend, is excluded.

According to the figures published today, sales of food rose 2.3 per cent compared with October 2011 but after taking inflation into account the figure was revised to a real terms decline of 1.6 per cent.

The figures, released in a report by KPMG and the Scottish Retail Consortium, showed that non-food sales fell by 4.7 per cent year on year.

Fiona Moriarty, director of the Scottish Retail Consortium, said: “This really wasn’t the result retailers wanted. September’s modest sales boost offered some cause for cautious optimism, but continuing concerns about the economy led many customers to batten down the hatches again in October.

“The non-food category was a tale of two halves. While clothing and footwear performed well, it was a different story for other non-food goods, such as electricals and items for the home.

“Household incomes are still being squeezed, and many people will have an eye on saving ahead of Christmas rather than buying big-ticket and discretionary items.”

She added: “With consumer confidence at a six-month low, hopes of sales picking up in the run-up to Christmas will hinge on retailers reading the market closely; that means offering customers opportunities for seasonal spending at competitive prices.”

When April was taken out of the equation, the sales figures were the worst since January, when a 1.5 per cent decline was recorded.

The report revealed that April showed a fall of 4.1 per cent. But retail experts were tempted to overlook that when observing overall trends.

The way Easter fell this year meant that the April figure did not take into account the sales boost normally associated with the spring holiday weekend.

David McCorquodale, head of retail for KPMG, said: “October’s sales figures send a worrying signal about the festive season ahead for retailers in Scotland.

“Food and drink sales failed to track inflation and therefore reflected a decline in volumes.

“Despite the cold temperatures in October, clothing 
and footwear sales had good growth in the first week but then faded in the latter half of the month.

“This shows consumers may have bought into autumn and winter collections but are still too nervous to fill their wardrobes with them.”

He added: “The recession 
may officially be over, but it will take a little longer for consumers to feel they can spend freely again.

“Retailers are holding less stock than a year ago and may choose to be cautious with pre-
Christmas sales in order to protect margins.”