Scottish sales growth weakens further
19 August 2010 09:41
Fears of a further descent into the economic doldrums were fuelled yesterday as the Scottish Retail Consortium revealed that sales during July suffered the worst fall since August 2000.
Like-for-like sales in Scotland in July were 1.4% lower than in July 2009, when they had risen 0.6% according to the latest SRC-KPMG Scottish retail sales monitor. July's fall was the worst since August 2000, apart from April 2010 when the year-on-year comparison was weakened by Easter falling earlier than in 2009. Similarly, excluding Easter distortions, total sales in July were only 0.8% up on a year ago, the weakest growth since April 1999.
Food sales were slightly down on a year ago. Clothing and footwear weakened further, despite some aggressive discounting in clearance sales. Homewares showed an even larger decline than in June, with big-ticket and discretionary items hardest hit.
Like-for-like sales fell further below their year-earlier level, and remained worse than in the UK, where the weather was less wet than in Scotland. UK sales were 0.5% higher than in July 2009, when they had risen 1.8%. Consumer confidence has fallen more in Scotland than in the UK and, with more concern about public sector job cuts, has made shoppers more cautious about spending.
Fiona Moriarty, director of the Scottish Retail Consortium, said: "Scottish shoppers are clearly concerned about the current economic outlook, especially when it comes to job prospects. The latest official figures show unemployment is rising in Scotland and seems to be stoking existing nervousness about household spending.
"Weak consumer confidence means non-essential purchases are being put on hold. Customers are shopping carefully, looking for deals and value for money. Cautious shoppers are delaying spending on discretionary and big-ticket housing items.
"We've seen a run of months where trading conditions continue to weaken. Retailers will be hoping 'back to school', together with the new autumn and winter ranges will tempt shoppers to loosen the purse strings."
David McCorquodale, head of retail in Scotland, KPMG, added: "Like-for-like sales in Scotland fell in July by 1.4% in Scotland, compared with a small increase of 0.5% across the whole of the UK. The greater decline was in non-food sales, where a wetter July than in the rest of the UK has clearly hit fashion and footwear.
"Looking at the three-month weighted average, however, where like-for-likes are down by 1.1% compared to an increase of 0.9% across the UK shows the austerity language of the new coalition Government is getting through to the consumer. With uncertainty around the identity of the target of the cuts in the public sector, it is clear that the Scottish consumer has opted to plan for the worst and address the family budget rather than defer the day.
"Retailers continue to employ all measures to succeed and increase consumer spend, whether it be clearance sales or promotions. The winners appear to be those retailers with excellent customer awareness, product offering and community involvement."
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