Scottish Retail sales growth falls behind UK

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% compared to growth of 2.1% across Britain.

In the first three months of 2017 alone, sales in Scotland fell by 0.4% while the figure for the UK as a whole showed a drop of 1.4%.

While the value of sales across Britain flat-lined, in Scotland this grew by 0.5% 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 the value of retail sales in Scotland grew by 1.8%, compared to a rise of 4.8% for Britain as a whole.

David Lonsdale, director of the Scottish Retail Consortium, said while the increase in the value of sales in the first quarter of this year is “encouraging at first glance”, he added that the situation “looks less rosy once falling shop prices are taken into account”.

Mr Lonsdale said: “Indeed 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 in the first quarter of this year, 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.”

• SRC