Bargain hunting drives a rebound in January.
Paul Martin, Head of Retail at KPMG UK, said:
“January is typically a challenging month for Scotland’s retail sector, so any rise – however modest – will be a small victory for the industry following an incredibly challenging 2019. It’s too early to say with complete certainty that we’re entering a period of renewed consumer confidence, but with total sales increasing by 1.3% compared with January 2019, it’s been a positive start to 2020. The data also compares favourably to the UK as a whole, which witnessed a fairly static sales growth of just 0.4%.
“Greater certainty over Brexit has undoubtedly played its part in encouraging shoppers to spend more, but there are some indications that the return to growth is being driven primarily by aggressive sales and marketing activity by High Street retailers, which isn’t always good news for bottom-lines. 2020 looks set to be a make-or-break year for a number of high-profile players in the market. We’re off to a somewhat positive start, but the industry remains relatively nervous about what lies ahead.”
Ewan MacDonald-Russell, Head of Policy & External Affairs at Scottish Retail Consortium, added:
“Like early daffodils, this month’s sales figures bring forward signs of optimism for Scotland’s retailers after a chilly few months. Real terms sales growth of 1.7 percent will bring a little relief to the High Street, especially given the more broadly-based pick up across categories, but it remains to be seen if that uplift will be sustained over the next few months.
“Food sales were particularly strong, with Hogmanay and Burns Night celebrations during the period, although it’s likely at least some of the 2.7 percent increase was the result of inflation. Non-food sales were up by 1.1 percent with small electricals, DIY items, mobile phones and furniture doing well. A portion of those sales were driven by discounting, and so the better performance may translate not into increased but into smaller margins. Fashion and footwear sales continued to be sluggish, with a combination of wet weather and customers concerns over sustainability appearing to inhibit purchases.
“Retailers are therefore craving certainty, a competitive cost environment, and some encouragement for consumers. The Scottish Budget took some positive steps in this direction earlier this month. We hope the new Chancellor will listen to the concerns of retailers and take action to boost consumer spending and reduce the burden on retailers in next months’ UK Government Budget.”
Notes to Editors:
Pictured: Paul Martin, Head of Retail, KPMG UK
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