Little festive cheer for Scottish retailers after worst December on record

SCOTTISH retailers will continue to face challenges in 2019 while recovering from the “worst real-terms December sales figures in 20 years”.

December 2018 sales dipped 1.2% compared to the previous year when they increased by 0.3%.

Adjusted for inflation, this marks their lowest level since the Scottish Retail Sales Monitor began in 1999.

Total sales across Scotland were down 1% compared to a 0.8% rise the previous year, marking the worst December outcome since 2014.

Food sales grew 1.3%, although still the lowest level since February 2017, with total non-food sales decreasing by 2.8% compared to December 2017 when there was a 2.2% drop.

Ewan MacDonald-Russell, head of policy and external affairs at the Scottish Retail Consortium, said: “There was little Christmas cheer for retailers with the worst real-terms December sales figures in 20 years.

“Whilst the dip was less pronounced than that witnessed the previous month, it’s clear stores have suffered as consumer spending is pared back under pressure from inflation, rising household costs and against a backdrop of uncertainty.

“Christmas is the key trading period for retailers so these figures bookend an underwhelming 2018 for the industry.

“Nonetheless, despite the gloom retail sales actually grew by 0.3% last year, in line with recent Scottish GDP figures.

“What should concern policymakers more is sluggish retail sales can be a warning light for the wider Scottish economy.

“With political and economic uncertainty likely to continue, there may continue to be challenges ahead in 2019.”

One of the main reasons attributed to the decline in non-food sales was the weak performance of Christmas decorations as consumers chose to reuse older baubles rather than splash out on new items.

Paul Martin, UK head of retail at KPMG, said: “Retailers were generous with discounts and other promotional offers throughout the month, but this wasn’t enough to encourage shoppers to the high street.

“The contrast in performance between the high street and online was plain to see in December, even though 2018 saw a slowdown in online retail sales.

“2018 has been an extremely tough year for retailers, and as we enter 2019, the focus should be on remaining resilient in the face of both known and unknown factors.”