Record December sales fall for Scottish retailers amid Covid crisis

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By Ian McConnell

Business Editor

RETAILERS in Scotland last month suffered their worst year-on-year plunge in sales for any December on record, amid coronavirus-related restrictions, latest figures reveal.

Total Scottish retail sales value last month was down by 16.6 per cent on December 2019.

The Scottish Retail Consortium’s latest monthly figures, published today, also show the average year-on-year drop in total sales value during 2020 was 12.8%.

The industry body declared that a “blue Christmas” had ended the “worst year for Scottish retail sales”, amid lockdowns at the start and end of the crucial trading month which resulted in closures of shops deemed to be “non-essential”.

The value of non-food sales in Scotland in December was down by 33.4% on the same month of 2019. Non-food sales generally reflect more discretionary elements of consumer spending.

Food sales value last month was up by 3.3% on December 2019.

The SRC sales figures began in 1999.

SRC director David Lonsdale, noting the year-on-year fall in total Scottish retail sales in December was 14.8% in volume terms with deflation taken into account, said: “Scotland’s retailers are in the depths of the biggest crisis in two decades after the worst-ever December trading. Retail sales fell in real terms by 15 %, the worst since June, as lockdowns at the start and end of the month snuffed out hopes of a late rally to end the year.”

He noted that the year-on-year movement in food sales value, although positive, was the second-weakest since last spring.

Mr Lonsdale cited lack of competition from “eateries”.

Restaurants across central Scotland were closed to sit-in customers for a significant part of the month and, when they were allowed to open, had to close by 6pm and were unable to serve alcohol. Takeaway food operations have remained open.

Mr Lonsdale said: “Food sales remained positive but recorded their second-weakest monthly performance since the spring, underwhelming considering the lack of competition from eateries.

“Non-food sales from stores slumped dramatically, by over a third compared to the same period the previous year.

“Closed stores for much of the month coupled with the loss of the post-Christmas discounting period clobbered non-food shops, removing the final chance for them to tempt customers and shift unsold stock.”

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Mr Lonsdale added that online sales had “fared well and blunted the decline somewhat for non-food categories”.

The SRC estimated that the year-on-year fall in the value of non-food sales in December would, adjusted for the impact of online business, have been 17.7%.

Mr Lonsdale said: “It was a ‘blue Christmas’ for retail – and with shopkeepers missing out on much of the golden trading quarter the pressure on those businesses is reaching boiling point.

“It isn’t just down to weak Christmas trading. Across 2020 sales fell massively – far and away the worst figures SRC has reported during 22 years of the survey. This fall can be clearly attributed to the repeated lockdowns and weak economy; and the bleaker picture compared to the UK as a whole shows how retail has suffered from longer-lasting lockdowns and restrictions.”

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Paul Martin, partner and UK head of retail at accountancy firm and survey sponsor KPMG, said: “It would be an understatement to describe December’s figures [as]potentially devastating for the industry. The final run-up to Christmas offered Scotland’s high streets the opportunity to regain some lost ground, but our data suggests sales stuttered throughout the month, before falling sharply in the final few days…of December. Increasing Covid cases, ongoing restrictions and a tightening of rules on social gatherings appear to have seriously dented any prospects of short-term recovery.”

He added: “Throughout 2020, non-food retailers bore the brunt of the pandemic and December’s figures reinforce that fact, with year-on-year sales down more than 33% – the worst result since June. 2021 will undoubtedly be one of the most challenging years ever for Scotland’s retail sector.”

However, Mr Martin expressed “some cautious optimism that a vaccine rollout may result in a gradual increase in consumer spending and footfall”.

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