Lockdown heaps pressure on retailers as sales drop accelerates
SCOTTISH retail sales value in November was down more than 10 per cent on the same month of last year as Tier 4 lockdown restrictions led to shop closures across much of the central belt, the latest figures reveal.
The Scottish Retail Consortium, publishing the figures today, describes weakness of clothing, footwear and beauty product sales during what is traditionally a very busy period as an “enormous concern”.
The year-on-year fall in overall retail sales value accelerated to 10.2% last month, from 8.5% in October. This deterioration occurred even though the value of food sales in Scotland in November was up 4.8% on the same month of last year. This was a slight acceleration from a 4.4% year-on-year rise in October.
In contrast, the year-on-year decline in the value of non-food sales, which tend to reflect the more discretionary elements of consumer spending and were hit by store closures arising from the lockdown, accelerated from 19.3% in October to 22.8% in November.
Non-essential shops in 11 local authority areas in Scotland had to close for three weeks from November 20 as a result of a move to Tier 4 restrictions. These were lifted at the end of last week, with most of the central belt placed in Tier 3 restrictions at that point.
The 10.2% fall in Scottish retail sales value, comparing last month with November 2019, was worse than the average year-on-year decline of 8.1% over the last three months. However, it was not as bad as the average year-onyear fall of 11.2% on a 12-month view.
Highlighting shop-price deflation, the SRC noted the year-on-year fall in Scottish retail sales volumes in November was 8.4%.
Ewan Macdonald-russell, head of policy and external affairs at the SRC, said: “Scottish retail sales plummeted in November as retailers were hammered by the level 4 lockdowns. Overall sales fell by 8.4% in real terms – but it was non-food stores which truly suffered with sales falling by more than a fifth. Clothing, footwear, and beauty all continued to struggle, which is an enormous concern during the traditional golden shopping period of the year for non-food stores.”
He noted, however, that the year-onyear rise in food sales value in Scotland had accelerated for a third consecutive month in November.
Mr Macdonald-russell cited a boost to food sales from “the continuing lack of competition from closed hospitality businesses and the launch of festive ranges”.
Paul Martin, partner and UK head of retail at survey sponsor and accountancy firm KPMG, said: “November’s data reflects the near-daily fight for survival facing many of Scotland’s retailers. Ongoing localised lockdowns, including Scotland’s biggest retail centre, Glasgow, [have] hit the sector at a time when it usually reaps the rewards from a pre-christmas sales surge.”
And he warned it could be years before the sector returned to stability and growth.
Mr Macdonald-russell said of the November figures: “It’s clear shoppers have looked to start Christmas shopping early where possible. Christmas decorations saw record sales as customers look to offset bleak lockdowns with light and colour along with chocolate and cosmetic advent calendars. We also saw signs customers were buying festive gifts early, albeit where necessary from grocery and digital retailers as physical shops were closed across 11 local authorities.”
Looking ahead, and citing the need for further support for the sector amid the coronavirus pandemic, he added: “For many retailers it’s all going to come down to December trading; and in west and central Scotland the last 14 days running up to Christmas. One in eight pounds is traditionally spent in December, so there will be opportunities for stores to attract customers.
“However, unless we see a big change from the last 10 months of falling sales and declining footfall, it’s going to be very difficult for a lot of businesses in January. With that in mind, early clarity on business rates relief and a commitment to a high street voucher to stimulate some spending would be very welcome from Scottish ministers in the near future.”
Mr Martin said: “To some extent, we’re witnessing a tale of two halves, with food sales continuing to perform relatively well, buoyed by the news that families can meet for Christmas, and the closure of hospitality venues, which appears to have created a short wave of stockpiling. However, with non-food takings slumping to a decline of more than 22%, it’s clear the industry is far from any sign of recovery.
“Naturally, a vaccination rollout programme should slowly deliver a return to some form of normality in 2021, but it could be years before Scotland’s retail sector returns to stability and growth.”