Scotland’s retail sector 'trapped in the depths of a dark and dismal winter' after fresh sale plunge

Scotland’s retail sector remains “trapped in the depths of a dark and dismal winter” after the run of failing sales figures extended to a 12th successive month in January.

An almost empty Buchanan Street in the centre of Glasgow as people observe the spring 2020 lockdown. Non-essential stores were closed again more recently under tighter restrictions, hammering trade. Picture: John Devlin

Total sales north of the Border tumbled 27.9 per cent last month compared with January 2020, when they had increased by 0.9 per cent, according to the latest sales monitor from the Scottish Retail Consortium (SRC) and KPMG.

While total food sales increased 4.3 per cent as only essential stores remained open and restaurants and cafes were closed to walk-in trade, total non-food sales plunged 54.8 per cent, year on year.

Adjusted for the estimated effect of online trading, which has boomed amid lockdown, total non-food sales were down by 26.4 per cent in January.

Ewan MacDonald-Russell, head of policy and external affairs at the SRC, said: “January’s Scottish sales figures show shops remain trapped in the depths of a dark and dismal winter.

“Spending plunged as shops were forced to shutter up and, in many cases, discontinue click and collect services. The figures were the worst monthly performance since April and the worst ever January results and lengthened the run of failing sales figures to 12 successive months.

“There was little positive to report, with the only significant growth in food sales, albeit in the context of no competition from eating out as a result of the closed down hospitality trade.

“Conversely there was bad news across non-food stores, with physical non-food retail seeing sales fall by half.”

He said furniture retailers had been particularly badly hit after missing out on a key selling season, while other retailers had to contend with “immense logistical pressures” as the lack of notice and ever-shifting regulations put “exceptional pressure” on their operating models.

MacDonald-Russell added: “The SRC welcomed the recent announcement from the Finance Secretary setting out retailers could expect a three-month extension to the current full business rates relief. Nonetheless, the pressure of extended lockdown is taking its toll on shattered shops.”

The fall in sales was slightly less pronounced when measured on a like-for-like basis, which takes into account store closures, openings and changes in selling space. On that score, sales decreased by 25.2 per cent when compared with January 2020, when they had fallen by 0.6 per cent.

Paul Martin, partner and UK head of retail at KPMG, said: “It should come as no surprise that Scottish retail figures remain subdued. With fresh restrictions introduced at the start of January, retailers have had to contend with another month of empty high streets as consumers stayed at home. Poor weather has exacerbated the issues, creating a perfect storm.

“We’ve reported for some time on the shift to online buying, but there’s also growing evidence consumers are pressing pause on big purchases as they wait for a return to a degree of normality later in the year, and that’s creating additional logistical costs for retailers.

“While the latest data clearly reinforces the precarious position the industry is in, there are some reasons for cautious optimism. The vaccine rollout continues at pace and business rates relief has been extended.”

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