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December fall in Scottish retail sales rounds off ‘testing 2014’, says David Lonsdale of Scottish Retail Consortium

The decline in food sales in December was less than previous months, and David McCorquodale believed this would make grocers feel their Christmas campaigns hit the mark.
The decline in food sales in December was less than previous months, and David McCorquodale believed this would make grocers feel their Christmas campaigns hit the mark.

Scottish retail sales fell 1.8% last month, rounding off what an industry leader described as a testing year.

Sales of food at Christmas were down 1.9%, the best performance since August, in the Scottish retail Sales Monitor for last month.

The 1.8% fall in December compares with 1.1% in December 2013.

Like-for-like sales decreased 2.6% and the total decrease when adjusted for deflation was 0.2%.

The food sales fall was greater than December 2013, when they had decreased 0.3%.

David Lonsdale, director of the Scottish Retail Consortium, said: “Even adjusted for shop prices, which are falling at the moment, the small decrease in sales in December is unfortunate and rounds off what was a testing 2014 for many in the industry.

“Consumers remain cautious and the surge in online sales at the time of Black Friday in late November clearly had the impact of pulling sales forward, particularly from the early part of last month.

“There were some categories where the news was better than others.

“Clothing was the stand-out performer, doing well as consumers bought festive-period related party wear and fancy dress, or updated their wardrobes with seasonal ranges, often in response to retailers’ promotional activities.

“Whilst the overall performance of non-food slipped, the decline in food sales was less marked, turning in its best performance since August and helped by purchases of Christmas-related fare.”

He believed this pointed to a continuing fragility in the economic recovery.

He continued: “Holyrood is set to exert significant influence over take-home pay and disposable incomes later this year when it begins setting income tax rates and when the First Minister’s alternative to council tax is unveiled.

“It is absolutely imperative that these decisions on personal levels of taxation, and therefore the amount of money in people’s pockets, are ones which support consumer spending and economic recovery.”

David McCorquodale, head of retail at KPMG, said: “There are some positives amongst the sea of negative sales figures in December which round off the year for Scottish retailers.

“Firstly, the ‘sale windows’ of Black Friday and post-Christmas saw consumers flock for a discount, and this helped to raise the three-month average for non-food sales to show growth of 0.7%.

“This demonstrated the significant role Black Friday played this Christmas.

“Coupled with retail performance throughout the traditional Boxing Day sales, the statistics reflect how consumers today need a bargain before committing to spend. The true cost at margin level to the retailer will only surface as the campaigns wind down.”