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Scots retailers will be ‘fighting for survival’ over ‘crucial’ quarter

Shoppers in Oxford Street looking for bargains.
Shoppers in Oxford Street looking for bargains.

Scotland’s retailers will be “fighting for survival and recovery” over the next few months as the challenges facing the sector show no signs of abating, according to a new report.

September was the eighth month in a row of declining retail sales in Scotland, with total sales last month down 6% compared with the same period a year earlier.

When adjusted for deflation the decrease was 4.4%, the Scottish Retail Consortium (SRC)-KPMG Scottish Retail Sales Monitor indicated.

Food sales grew in September but non-food and fashion and footwear retailers suffered a month of “woeful performance”.

Figures indicated total food sales increased 3.7% last month compared to September 2019, when they had increased by 2.2% on 2018.

This was above the three-month average growth of 3% and the 12-month average growth of 3.4%.

Total non-food sales decreased by 14.2% in September compared to September 2019, when they had decreased by 4% on the previous year.

This was below the three-month average decline of 15.7% and the 12-month average decline of 20.8%.

Paul Martin, head of retail at KPMG UK, said: “While September’s figures paint a slightly less bleak picture, the challenges facing retailers show little signs of abating.

“Total year-on-year sales were down 6%, which is a modest improvement from August’s 7.5% drop.

“With the resurgence of stricter lockdown rules and the prospect of a no-deal Brexit, consumer confidence remains low.”

He added: “As we enter the crucial ‘golden quarter’ period – when many retailers make the majority of their revenue – Scotland’s retailers will be fighting for survival and recovery.

“The retail landscape has changed massively and with key events like Black Friday on the horizon, the focus will be on learnings from recent months, reducing costs and implementing innovative ideas to drive up demand.”

The figures show that in September, Scottish sales decreased by 6.3% on a like-for-like basis compared with the same month last year, when they decreased by 1.8%.

This is below the three-month average decrease of 7.5% and the 12-month average decrease of 8.9%.

Ewan MacDonald-Russell, head of policy and external affairs at the Scottish Retail Consortium, said: “Another month of disappointing sales confirms Scottish retail is nowhere near returning to growth.

“A real-terms fall of 4.4% is the eighth successive month of falling sales and a huge concern to the industry ahead of the crucial Christmas trading period.

“While positive for grocers, there was little evidence of customers stockpiling over the month, instead it appears to be a shift from discretionary to essential spending.”

He added: “White goods, household essentials and electronics continue to perform well.

“Conversely, fashion, footwear and beauty products continue to perform poorly, with customers only buying necessary rather than indulgent products.

“There is also some evidence consumers are already turning to Christmas shopping – presumably to avoid queuing outdoors in winter.

“Overall, the Scottish retail industry is in fragile condition heading into the golden trading quarter.

“There are severe headwinds ahead.”

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