Picture 'unremittingly bleak' as Scottish retail sector suffers another double-digit decline
A partial return to school last month failed to stem the sales decline on Scotland’s high streets, leading to another hefty double-digit decline.
Industry leaders said February marked a slight improvement on January’s plunge, but the overall picture “remains unremittingly bleak”, particularly for non-food retailers.
Total sales north of the Border fell by 24.3 per cent last month compared with February 2020, when they had declined by just 0.8 per cent, according to the latest sales monitor from the Scottish Retail Consortium (SRC) and KPMG.
Total food sales were up 3.1 per cent as supermarkets and other “essential” stores selling food and drink products remained open, though that increase was slightly down on January’s gain. However, there was yet another slide in total non-food sales, which slumped 47.4 per cent, year on year.
Adjusted for the estimated effect of online sales, total non-food sales fell by 20.2 per cent last month versus February 2020.
David Lonsdale, director at the Scottish Retail Consortium, said: “February wasn’t quite as dismal as January for Scottish retail sales, but the overall picture remains unremittingly bleak. Sales… were only aided by a small but nonetheless discernible boost in kids clothing sales ahead of primary children returning to school.
“Grocery sales remained buoyant, although the slippage in the growth rate to 3 per cent was the slowest since August and was underwhelming when eateries and hospitality businesses remain shuttered.
“The main event was Valentine’s Day which saw positive food sales as couples celebrated at home. With Scots stuck at home and unable to visit shops non-food categories remained in the doldrums, although school clothing and shoes provided a chink of light for hard-pressed fashion retailers as parents prepared children for the return to the classroom.”
He added: “With sales down by more than a fifth it’s clear retail has suffered immensely from the lockdown restrictions imposed in response to Covid. However, this month’s figures suggest that there is suppressed demand in the economy.
“With the evidence continuing to show retail is a low-risk environment this reaffirms the important role the industry can play in restarting the economy when it’s safe to do so.”
Measured on a like-for-like basis, which takes into account store closures, openings and changes in selling space, sales were down by 21 per cent last month.
Paul Martin, partner and UK head of retail at KPMG, said: “The latest data suggests that Scottish consumers are continuing to tighten their belts and pause on spending until restrictions are eased.
“All eyes will be on the next two months as restrictions are gradually eased and we’re able to directly compare with the start of lockdown in March 2020.
“The recent UK and Scottish Budgets provided some short-term lifeline support to shops, but for many retailers – both independent and national – thinner margins, rising costs and a transformation in consumer behaviour could be the breaking point for the industry.
“However, we should have a degree of optimism that some lost ground will be regained as warmer weather, a successful vaccine rollout and fewer regulations encourage spenders back to Scotland’s struggling high streets.”