December snow freezes Scottish non-food sales
SRC-KPMG Scottish Retail Sales monitor December 2010
Like-for-like sales in December were 0.7% up on those in December 2009, when they had risen 1.4%. Sales showed an increase in only three months of 2010. Total sales were 3.4% up on a year ago, when they had risen 4.3%.
Food sales growth picked up, but probably partly reflected stocking up in the snowy weather. Clothing and footwear showed its largest year-on-year decline since May 2009. Homewares and furniture were also still down on a year ago. Snow benefited online sales early in the month but slowed again near Christmas as retailers experienced delivery difficulties.
Overall like-for-like sales growth edged up slightly while that in the UK weakened. But Scottish growth was against a much weaker December 2009, while the UK’s decline was from a strong December 2009.
Fiona Moriarty, Director of the Scottish Retail Consortium, said:
“Overall, it was a steady Christmas of unspectacular growth but there was a stark division between retail sectors. All December’s sales growth came from food while extreme weather and economic uncertainties dealt a major blow to sales of non-food goods. But a seasonal surge in food sales cannot disguise customers’ cautious mood.
“The heavy snow hampered people’s ability to get out and shop in the first half of the month. Concern about further disruption encouraged people to use breaks in the weather for stocking up on essentials and Christmas food and drink, but gifts were less of a priority. The struggle to get around helped one-stop shopping destinations and neighbourhood stores. There was a big rush in the last week before Christmas and lots of bargain hunting once the clearance sales started. But it wasn’t enough to outweigh the damage to non-food sales from the combination of bad weather and fears about job cuts and falling incomes.”
David McCorquodale, Head of Retail in Scotland, KPMG, said:
“Despite snow and ice bringing the country to a virtual standstill and some internet retailers refusing to take orders from mid-month, like-for-like sales in Scotland were actually up 0.7% during December when compared with the same period 12 months earlier. This is contrary to the UK as a whole which saw a drop of 0.3% for the same time period.
“Christmas helped food and drink sales enjoy their biggest gain in 18 months, showing a like-for-like growth of 3.5%. The gain is partly driven by inflationary increases which have crept in over recent months. Smaller, local stores also benefitted as travel warnings prevented shoppers from travelling distances for their purchases. A portion of the increase can also be attributed to consumers stocking up due to the bad weather.
“Non-food sales declined by 1.8% from 12 months ago. Although non-food sales improved in the final week as shoppers headed out to take advantage of clearance bargains in advance of the VAT rise, this was not enough to make good the pre-Christmas shortfall and was at lower margin due to the commencement of the sales.
“2011 is set to be a challenging year but Christmas updates from retailers do not reflect the dire picture of two years ago.”
