Stark warning from Scottish high street after 'microscopic' sales gains

The latest snapshot from the Scottish Retail Consortium (SRC), published today, shows that sales, by value, rose by a “microscopic” 0.1 per cent in September, compared with the same month last year and once adjusted for the effects of inflation.

Ewan MacDonald Russell, deputy head of the SRC, said last month “brought a little stability” to the sector after a summer of falling sales. But he warned: “Whilst these figures are an improvement on August, the truth is sales remain stuck in the doldrums. Retailers will be looking to the Chancellor’s Budget later this month with hopes that there will be some optimism to help bolster consumer confidence ahead of the crucial Christmas trading period.

“They’ll also be hoping there aren’t any expensive surprises for businesses already weighed down by costly business rates and a slew of regulatory initiatives.”

He noted that fashion and footwear had a better month as the “changeable weather” encouraged shoppers to refresh autumnal wardrobes. September’s figures were also impacted by falling prices as competition between retailers improved the options for consumers.

MacDonald Russell warned of continuing supply chain challenges due to “international instability” which is adding both time and cost to deliveries.

The latest sales monitor showed that total food sales decreased by 0.7 per cent versus September 2023, when they had increased by 9.2 per cent at a time of higher food inflation. This September was weaker than the three-month average decrease of 0.5 per cent.

Total non-food sales fell by 0.3 per cent in September compared with a year earlier, when they had risen by 3.5 per cent. This was above the three-month average decrease of 0.8 per cent. Adjusted for the estimated effect of online sales, total non-food takings nudged up 1 per cent last month versus September 2023.

Linda Ellett, UK head of consumer, retail and leisure at KPMG, which helps to produce the monthly sales monitor, said: “September saw modest, but welcome, sales growth for retailers. Children’s clothing, footwear and accessories saw a boost from the start of the school year, with household budgets feeling slightly less constrained for some parents compared to last year. With energy prices having again risen, all eyes now turn to the Budget and what impact that will have on household discretionary spending in the final quarter of the year.”

The latest monitor spans the period from August 25 to September 28. It showed that total sales in Scotland decreased by 0.5 per cent compared with September 2023, when they had grown 6.1 per cent. This was better than the three-month average decrease of 0.6 per cent but poorer than the 12-month average growth rate of 0.4 per cent. Adjusted for inflation - so in real terms - there was a year-on-year increase of 0.1 per cent last month.