Cost of living: Easter sees 'welcome' uplift in Scottish retail sales but belt-tightening hits clothing
Publishing its latest sales monitor, the Scottish Retail Consortium (SRC) said total sales north of the Border rose by 9.1 per cent last month, compared with April 2022. This was above the three-month average increase of 8.9 per cent but was driven largely by price hikes. Adjusted for inflation, the year-on-year growth was just 0.3 per cent. Consumer price inflation has been running at double-digit levels though most economists expect that to cool over the remainder of the year.
SRC director David Lonsdale said: “Easter provided a slender but nonetheless welcome uplift to retail sales in Scotland last month. The real terms value of retail sales edged back into positive territory, after the decline witnessed in March, driven by health and beauty categories and as people spruced up their homes and gardens.
“However, the figures reveal a continued and indeed more pronounced polarisation of performance between food and non-food categories. With households spending more on groceries due to elevated levels of inflation, the consequences of this can be seen with more discretionary spending areas losing out, with volumes declining.”
Total food sales, by value, increased by 15.4 per cent versus April 2022, with record food price inflation fuelling the year-on-year growth. In contrast, total non-food sales were up just 3.9 per cent, compared with a year earlier. Adjusted for the estimated effect of online sales, total non-food sales grew by 2.5 per cent.
Lonsdale said clothing, larger furniture and electricals had lost out last month, while there were “pockets of demand” for energy saving appliances, gaming consoles, gardening and DIY goods. He added: “Whilst overall inflationary pressures and more specifically food price rises have hopefully crested and will begin to ease, it’s too soon to say whether this will correspond with greater spending on more discretionary retail products. After all, Scotland’s shoppers face several headwinds which may prove hard to shrug off and which could well crimp consumer spending, notably higher council tax and income tax and elevated mortgage rates.”
Paul Martin, partner and UK head of retail at KPMG, which helps to produce the monthly sales monitor, said: “It was a mixed bag for retailers, with food sales the biggest growth area, aided by the Easter weekend and family gatherings. Noticeably, clothing and footwear sales didn’t perform as strongly as may have been expected at this time of year, which is likely down to a lack of sunny days across the country last month. Consumer demand has so far been fairly resilient to the twin drags of high inflation and high interest rates, but as government energy support comes to an end for many, savings start to dwindle and other household bills rise, it is likely that the next few months will continue to be challenging as the consumer tank empties. Much hinges on whether soaring food inflation can be brought under control enough to allow consumers to comfortably start spending again on non-essential items.”