High street woe as Scottish retail sales suffer record slump

Prime Minister David Cameron and retail expert Mary Portas walk through a street market in Camden, London. Photo: Kirsty Wigglesworth/PA Wire
Prime Minister David Cameron and retail expert Mary Portas walk through a street market in Camden, London. Photo: Kirsty Wigglesworth/PA Wire
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THE pre-Christmas economic gloom descending on the high streets has deepened, with new figures showing retail sales in Scotland have suffered their worst fall since records began.

Figures released by the Scottish Retail Consortium-KPMG sales monitor revealed that total sales were down 1.3 per cent on the same month last year and that Scotland was faring worse than the UK as a whole.

Retailing experts and politicians expressed alarm at the downward trend, which is the most severe seen since the sales monitor began compiling data in 1999.

The figures were published as a report written by the UK government in association with the television retail expert Mary “Queen of Shops” Portas claimed some town centres were “dead”.

The UK government commissioned research that found huge increases in the number of empty shops and claimed that high streets across Britain hadreached a “crisis point”.

The Scottish Retail Consortium-KPMG figures focused on the situation north of the Border and found total sales of non-food items fell by 3.3 per cent, although total food sales were up 0.9 per cent. Meanwhile total like-for-like sales, which strip out factors such as new store openings, were down 2.1 per cent on November last year. This was the worst figure experienced in like-for-like sales since August and the sixth decline recorded in the past seven months.

Like-for-like non-food sales fell 3.3 per cent, while like-for-like food sales were down 0.9 per cent. When compared with figures produced by the UK Retail Consortium, Scotland performed worse than the UK as a whole.

November’s figure of 1.3 per cent down on this time last year compared with a figure of plus 0.7 per cent for the UK.

The same pattern was detected when like-for-like figures were compared, with Scotland’s figure of minus 2.1 per cent more severe than the minus 1.6 per cent recorded across the UK.

According to the SRC, consumer confidence had picked up slightly since October, but for Scotland it remained below that for the UK.

Ian Shearer, director of the Scottish Retail Consortium, said the figures are “particularly troubling in the run-up to Christmas”, adding that the statistics showed the “biggest fall in total sales we’ve seen since we started this survey in 1999”.

Mr Shearer added: “Retailers in Scotland have had an exceptionally tough year, worse than the UK as a whole. Consumer confidence is currently lower in Scotland than the UK average and householders are more worried about jobs and the state of their personal finances.”

He added that the mild weather in November “added to the woes of clothing and footwear retailers, who struggled to sell winter ranges, and seems to have led people to begin their seasonal shopping later than a year ago”.

David McCorquodale, head of retail in Scotland for KPMG, said the fall in both total sales and like-for-like sales “shows once more that the health of Scottish retailing is deteriorating”. He added: “Christmas is a crucial trading period, but this year many retailers will be nervous and unsure as to how the season will pan out. It was hoped that cash-strapped consumers might look to spread the cost of Christmas over a period of two to three months, but the sales figures do not reflect that.”

Independent experts said people’s nervousness about their job security and their consequent preference for saving, rather than splashing out, was harming the retail sector.

“This is a continuing tale of woe for Scotland,” said Leigh Sparks, professor of retail studies at Stirling University.

“Despite much of the mantra that comes out of London, the economic recession is alive and well. People are very nervous about their jobs and they are keeping their money to themselves.

“Scottish retailing is not in a good place and anything that adds to the cuts in Scottish retailing is not good news.

“From a collective point of view, the economy needs people to spend in order for businesses to be successful. But from an individual’s point of view, in order to do that you have to hope that 25 million other people are making exactly the same decision.”

The SRC/KPMG analysis showed that non-food sales suffered their largest year-on-year decline, on a total sales basis, since May 2009 despite widespread promotions.

Clothing and footwear sales were hit by underlying uncertainty about jobs and incomes, as well as by the mild weather. Consumer caution continued to hit big-ticket homewares and furniture purchases most.

Stuart Mackinnon, a spokesman for the Federation of Small Businesses (FSB) in Scotland, said: “Around a fifth of our members in Scotland are independent retailers and anecdotal evidence from them suggests that November was a tough month.

“The FSB would urge people who value their high streets and independent retailers to get out there and use the shops that they want to see survive and thrive.”

The Scottish Government argued that a “broader and more comprehensive measure” was provided by the Retail Sales Index, which included internet sales and showed that Scottish retail sales in Scotland grew by 0.5 per cent over the year to the third quarter.

But Labour’s finance spokesman, Richard Baker, said: “This is grim news for the high street and grim news for the economy. It underlines the need for Scotland to have an economic policy that works and a plan for Scotland’s high streets.

“Scottish ministers have chosen to cut capital spending in Scotland even more quickly than George Osborne, pushing us into a vicious cycle of lower investment, fewer jobs and slower growth.”

Scottish Government spokesperson said: “The steps that we are taking to support Scotland’s economy will directly benefit the retail sector. Measures such as the council tax freeze, free university tuition and free prescriptions are helping promote retail sales by protecting household budgets from rising inflation and fuel prices. 

“We also continue to provide rates relief schemes which are far much more generous than elsewhere in the UK. This includes the Small Business Bonus Scheme.”