RETAIL sales in Scotland have grown by one tenth of the volume for the UK, new figures show.
Between the first quarter of 2016 and the same period this year, the volume of sales in Scotland rose by 0.2 per cent, compared to growth of 2.1 per cent across Britain.
In the first three months of 2017 alone, sales in Scotland fell by 0.4 per cent while the figure for the UK as a whole showed a drop of 1.4 per cent.
Loading article content
While the value of sales across Britain flat-lined, in Scotland this grew by 0.5 per cent in the period January to March 2017.
The latest Retail Sales Index for Scotland said: “This means that people in Scotland spent more on goods than they did last quarter (after seasonal adjustment), but got fewer goods in return.
“Over the last year, retail sales volumes grew by 0.2 per cent. Equivalent growth in Great Britain was 2.1 per cent. At the same time the value of Scottish retail sales, without adjusting for inflation, grew by 1.8 per cent annually. Equivalent growth in Great Britain was 4.8 per cent.”
David Lonsdale, director of the Scottish Retail Consortium, said that while the increase in the value of sales in the first quarter of this year is “encouraging at first glance”, the situation “looks less rosy once falling shop prices are taken into account”.
He added: “Shop prices have fallen each month for the past four years which demonstrates that retailers are having to work ever harder to maintain, let alone grow, sales values.
“Scottish retailers face a challenging trading period ahead. Rising commodity prices and changes in the exchange rate are pushing up import prices, the cumulative burden of government policies is mushrooming, whilst shoppers themselves are expected to keep a tighter rein on spending.
“Consumer spending, the mainstay of our economy, faces headwinds in the months ahead as household budgets contend with rising overall inflation and increases in council taxes. Higher statutory employee pension contributions are also set to take their toll on discretionary spending in each of the next two years.
“In the context of the UK General Election, Scottish retailers want to see policies from the political parties which keep down the cost of living, bolster disposable incomes, and help consumer spending take wing.”
Commenting on the fall in the volume of sales, Euan Murray, of Barclays Corporate Banking in Scotland, said: “Increased supply chain costs and issues could go some way to explaining the falling figures in this quarter, from the bad weather in Spain affecting food imports to the weak value of sterling, you don’t have to look far for a reason.
“The sector has also had the added pressure of a later Easter, which could have resulted in less consumer spend in quarter one.
“Overall, consumer behaviour and their expectations are changing dramatically with many looking for brands to offer in-store experiences and entertainment. With 36 per cent of UK e-retail sales via mobile, retailers must invest in their online and mobile shopping platforms to improve the user experience and drive growth.
“However, with inflation in the UK set to accelerate faster than earnings growth for the first time since 2014 and consumers planning to spend less on every category with the exception of grocery, its looking like it’s going to be an uphill battle.”