Scotland’s high streets hit two-year sales high

SCOTLAND’S high streets turned in the best sales figures for almost two years last month.

The January figures were welcomed by finance secretary John Swinney and hailed by retailers as an “encouraging start to what’s still likely to be a challenging 2013”.

Total sales for the month were 2.1 per cent up on January 2012, according to the latest Scottish Retail Consortium (SRC) KPMG retail sales monitor, published today.

Meanwhile, like-for-like sales – which strip out factors such as new store openings – were 1.1 per cent higher than 12 months ago.

Both measures saw the best growth for 21 months. Total food sales for January were 5.2 per cent up on the same month in 2012, providing the strongest growth since April 2011.

In real terms, non-food sales were down by 0.7 per cent on the first month of 2012, compared with a 5.5 per cent fall last January.

SRC director Fiona Moriarty said: “After battling consistently tough conditions through most of 2012, this is good news for Scottish retailers.

“The healthier pace of sales that finally developed in December gathered momentum in January to produce the strongest year-on-year growth since April 2011.”

David McCorquodale, head of retail at KPMG, said: “January’s sales figures are the best we have seen in close to two years. With like-for-like sales up 1.1 per cent last month, they built encouragingly on the modest progress made in December.”

New Year’s Eve was included in the January sales figures, helping to boost food sales. Hot pies, pizzas and custard proved popular with shoppers, perhaps seeking comfort food.

But other consumers were going for the healthier option, with sales of fruit and vegetables boosted – suggesting that some detox dieters were keen to work off the Christmas excesses.

The Burns Night celebration saw a boost for Scottish produce such as whisky.

After a good Christmas, clothing retailers had a more difficult time in January, with the cold weather meaning shoppers went for winter clothes, rather than the new-season ranges.

Sales of footwear were better, with men’s shoes doing well because of strong demand for both boots and formal footwear.

However, furniture and flooring sales continued to suffer as a result of difficulties in the housing market and because shoppers are still wary about big purchases.

Ms Moriarty said: “The fact that New Year’s Eve was included in the survey period this year, but not last year, boosted January’s food and drink results.

“Clothing and footwear was the strongest non-food category, thanks to winter weather getting people buying boots and stimulating bargain-hunting for seasonal clothing.

“This is an encouraging start to what’s still likely to be a challenging 2013. The key question now is: is this just a blip, or dare we hope it signals the start of a lasting revival for customers and retailers?”

Mr McCorquodale said: “Total food and drink sales were up 5.2 per cent, with comfort food selling strongly around the New Year, while detox diets provided a boost for fruit and veg sales.

“Meanwhile, Scotch whisky experienced strong demand around Burns Night, and homewares, which was the worst-affected area last year, also saw increased levels of demand.

“It’s not surprising that non-food sales remained sluggish, given that January is traditionally the month when Christmas debts are paid off.

“However, retailers generally will look back on successful seasonal campaigns, be relieved that consumers responded well to promotional activity and be glad that they went into the winter with lower stocks.

“It is still far too early to read too much into the figures, but this is a welcome and positive start of 2013.”

Mr Swinney said: “Whilst this is just one measure of retail performance, this would appear to be welcome news for the Scottish economy and a good start for 2013.

“The retail sector can be assured this government is doing all we can to maintain Scotland’s position as the most supportive business environment in the UK.

“The Small Business Bonus Scheme and other reliefs combined give Scottish business a real competitive edge.”