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Slow start to festive spending

Retail sales figures for last month suggest shoppers are holding off in the hope of discounted deals.
Retail sales figures for last month suggest shoppers are holding off in the hope of discounted deals.

Bargain-hungry shoppers have left Scotland’s retailers waiting for the traditional uplift in Christmas sales.

The latest SRC-KPMG Scottish retail sales monitor shows like-for-like sales, which strip out the effect of new shop openings and closures, were 0.6% down last month compared to a year previous.

However, total sales in the period were 1.6% ahead on the back of a 2.3% increase in food spend during the month, and a 1.1% increase in non-food sales.

The non-food performance was bolstered by the best outturn from clothing and footwear sales since July, but there was a weakening in the electricals market year-on-year following a very strong month in October.

The report found that health and beauty products rebounded during the month although sales of festive gift ranges were relatively sluggish, according to some major retailers.

Scottish Retail Consortium head of policy David Martin said shops were having to offer discounted deals to get customers through the door.

“November’s figures strengthen the sense that many of us are still cautious and holding off on much of our seasonal spending until Christmas gets closer,” said Mr Martin.

“After a subdued showing earlier in the autumn, fashion’s fortunes were reversed by growing demand for warm clothing and boots, making it the month’s best-performing category.

“Elsewhere in non-food, much of the growth was driven by customers responding well to the deals and discounts ushered in by the Christmas countdown.

“Food had a slight slowdown compared against October, reflecting lower inflation rates and a general trend that many shoppers were focusing on making savings and buying on promotion as far as possible.

“Overall, this is an acceptable but unexceptional result, broadly in line with the annual and quarterly averages for growth, which suggests a slow but steady start to festive spending.

“Retailers will be pinning their hopes on momentum picking up as we enter the last few weeks before the big day.”

David McCorquodale, head of retail at KPMG, said consumers remained cautious but there was greater confidence than was evident at the same point last year.

He said companies which had embraced multi-channel retailing, with a strong online presence complementing a traditional store estate, were best placed to succeed over the festive period.

“As we enter the final lap in the run-up to Christmas we can take heart from the fact total sales in Scotland grew again in 2013,” Mr McCorquodale said.

“At this stage last year we were used to recording negative total sales performance, particularly in the non-food segments.

“This year the 12-month averages of food and non-food sales are both positive.

“In the food category the three-month average growth in Scotland has been greater than or equal to the UK average for the last six months.

“There may be many reasons for this, including better response to grocer campaigns, colder weather requiring more food, and marginally less competition in the race for space in the convenience sector.

“Fashion retailers also had a better month as colder, sunnier weather provided the impetus to replenish the winter wardrobe.

“Despite consumers remaining cash-strapped from the longest recession on record, signs are that this Christmas will be better than last year and that those retailers who have invested smartly in their multi-channel capabilities will grab the share of it from those who haven’t.

“With Christmas falling on a Wednesday this year, the high street still has extra shopping days to benefit when internet purchases can’t promise delivery.”