Trading woes continued for retailers in Scotland during March with total sales falling 0.3 per cent year-on-year, according to data published today.
The Scottish Retail Consortium and KPMG’s monthly retail figures showed like-for-like (LFL) sales dropping 3.9 per compared to the same month last year when they increased 0.6 per cent, the worst decline since January 2000.
UK-wide retail sales fell at a record rate during March, with trading affected by the changing date of Easter, but even so it was a bleak month for companies north of the border as total sales declined year-on-year for the first time on record.
Fiona Moriarty, Director of the SRC, said: “This is the first time total Scottish sales have been less than for the same month the previous year since we started this survey in 1999.
“The fact that the Easter spending boost falls in April this year but was mostly in March in 2010 is a contributory factor, but the drop can’t be accounted for by that alone.
“Reality is biting for Scottish shoppers. People are increasingly nervous about the economy and their personal finances and are reluctant to spend unless they have to.”
Non-food sales continued their ongoing slump, with sales down 5.9 per cent LFL compared to last year, but a downturn in food trading is also concerning for the industry.
Food sales in February were up 0.2 per cent year-on-year on a LFL basis but last month dropped back 1.7 per cent LFL, although last year’s figures included Easter trading which is traditionally one of the busiest periods of trading for the sector.
David McCorquodale, Head of Retail in Scotland for KPMG, commented: “The food sector results may be distorted this month because some of the Easter purchasing fell into March last year.
“However, while this year’s later Easter may be a factor behind the drop of 1.7 per cent in food sales, it doesn’t mask the drop in volumes which have been offset to an extent by significant inflation in food prices.
“The most significant impact is seen in non-food sales, which fell by a massive 5.9 per cent. We have seen an emergence of new, lower spending patterns since the middle of January as consumers re-adjust their family budgets to take into account the combination of mounting fuel and utility costs, falling house prices, higher VAT and real inflation.”
Clothing experienced its worst year-on-year decline in trade for three years, and further weakening of forward orders for furniture and floor-covering products add to the poor current sales for this sector.
Electricals sales were aided by the launch of the iPad 2 and health & beauty products showed gains in some area, though this was mostly promotion led.
McCorquodale added: “Many retailers will not be able to sustain this ongoing weakness in demand beyond the short term and are hoping for some good news around the extended bank holiday period and a feel-good factor driven by the royal wedding.
“However, as disposable income continues to fall, without reducing saving or increasing borrowing - which would oppose current trends - this will not be possible.”