Festive trading fails to boost sales for struggling retailers

Retailers experienced a “bleak midwinter” in December as festive shoppers failed to boost sales significantly, new figures show.

Total sales in Scotland in December increased by 0.4% compared with the same month in 2018, when they had decreased by 1%, the SRC-KPMG Scottish Retail Sales Monitor showed.

Retail experts said the figures were skewed by Black Friday which was included in December figures for 2019 but in November data the previous year.

Looking at the year-on-year change over November and December together to iron out the Black Friday distortions, sales declined 0.9% compared to that period in 2018.

When adjusted for deflation of 0.4% over the two months, as measured by the BRC-Nielsen Shop Price Index, the real-terms decline was 0.5%.

Scottish Retail Consortium (SRC) director David Lonsdale said: “It was more bleak midwinter than festive frolics for Scottish retailers as shop takings slipped during the critical Christmas trading period.

“Over the crucial two-month period leading up to Christmas, real-terms sales dipped by 0.5% – the second successive year of negative figures.

“That rounded off a pretty tepid 2019, which saw online-adjusted sales nudge up by 0.3% across the year.”

He said Christmas food sales were positive, with consumers able to take advantage of a vegetable price war as grocers cut the price of traditional staples such as Brussels sprouts and parsnips, while gins and soft drinks also did well over the period.

Non-food sales were mixed, with kitchen appliances, bluetooth devices and beauty ranges performing reasonably while clothing and footwear struggled.

Paul Martin, UK head of retail at KPMG, said: “The latest figures reflect the overwhelming challenges facing Scotland’s high streets.

“2019 was dominated by the loss of a series of high-profile retail names and it appears the usual pre-Christmas rush has failed to significantly turn around fortunes.

“At first sight, an increase in sales of 0.4% offers some relief but the late date of Black Friday has somewhat skewed the figures and, if we look at both November and December for comparison with last year, a drop in sales of almost 1% offers a more realistic picture of the struggle facing the retail industry.

“With greater clarity over Brexit and a slight rise in overall business optimism, we could see consumer confidence return, but retailers are facing significant challenges, driven by a huge range of factors – from a reduction in traditional demand towards new channels, increased costs and continued economic uncertainty.”