Cost of living crisis: Scottish retailers warn of 'humdrum' start to golden quarter but blankets fly off shelves
Scottish retailers have endured a “humdrum” start to the so-called golden quarter as consumer belt-tightening saw sales cool in real terms.
Publishing its latest sales monitor, the Scottish Retail Consortium (SRC) said total sales fell 0.3 per cent last month, compared with October 2021 and when adjusted for the effects of soaring inflation. Non-food sales were hit the hardest as shoppers cut back on discretionary spending.
SRC director David Lonsdale said: “Retail sales slipped backwards in real terms in October as the rise in sales was outweighed by ever increasing inflation. Despite being the first month of the golden trading quarter, retailers will be disappointed not to have seen any surge in sales either for Halloween or early Christmas-related trading. Food volumes continue to fall, indicative that customers carry on having to pay more for fewer items. That is having a knock-on effect on more discretionary retail spending.”
He said the “few signs of life” had been shoppers snapping up energy-saving items such as air fryers for cooking, heated clothing airers and blankets. Clothing sales in particular were poor last month, turning in the weakest performance since February, with consumers failing to refresh autumn wardrobes.
“Weak trading is a huge concern for retailers who have suffered two successive poor Christmases,” Lonsdale added. “With costs skyrocketing the pressure is building on retailers to deliver a good performance. However, the Scottish and UK governments need to urgently assess the costs they are adding to businesses and see where they could lighten the burden.”
The latest snapshot showed that total food sales increased by 10.9 per cent compared to October 2021, when they had fallen by 1.3 per cent. October was above the three-month average growth of 10.2 per cent and the 12-month average growth of 3.1 per cent. Those figures are not adjusted for the impact of inflation.
Total non-food sales rose by just 2.4 per cent in October, compared with the same month last year, when they had increased by 4.8 per cent. Again, the figures do not take inflation into account. Adjusted for the estimated effect of online sales, total non-food sales fell by 0.5 per cent in October versus a year earlier, when they had increased by 0.4 per cent.
Paul Martin, partner and UK head of retail at KPMG, which helps to produce the monthly sales monitor, said: “Despite the price of goods being higher than 2021, retail sales during October slowed to 6.3 per cent growth in value year on year in Scotland. Unfortunately, this value increase is driven by inflationary pressures and doesn’t give the full picture of sales volumes. The bottom line is that consumers are buying fewer products per shop, with overall volumes of both food and non-food in decline.
“Sales across almost every category both online and in store fell year on year as consumers adjust to shrinking household incomes. Retailers will be hedging their bets on upcoming events such as the World Cup and Black Friday to boost sales during the crucial golden quarter.”