Easter food shopping helps boost retail figures

Easter egg buyers helped boost Scotland's retail sales according to the latest figures, but spending on non-food items has dropped to its lowest level in four years.

The April 2017 retail sales monitor by the Scottish Retail Consortium and finance company KPMG found total Scottish sales jumped 2.5% last month, a 3.1% rise when adjusted for inflation, compared with a fall of 3.3% in April 2016.

The monthly growth is distorted by the timing of Easter but takes the 12-month average to minus 1.0%, the highest since December 2014.

Total food sales rose 6.8% compared to April 2016, when they had decreased by 1.7%, while total non-food sales dropped 0.8%, compared to a 4.4% fall in the same period last year.

On a three-month basis, the online-adjusted total non-food change was minus 2.0%, the sharpest decline since January 2013, excluding Easter distortions.

Scottish Retail Consortium director David Lonsdale said: "The impressive spike in Scottish retail sales last month is encouraging, albeit it was flattered somewhat by the timing of Easter this year. Nonetheless, retailers will look on this as something of a rainbow amongst the gathering storm clouds, given expectations of an unsettled and squally period ahead for consumer demand.

"There was a further and stark polarisation in the retail sales performance of food and non-food categories. Grocery did well, especially fayre associated with the Easter holiday period.

"Indeed the total value of food sales recorded their best three-month performance since autumn 2013, helped in part by the recent return of food price inflation.

"In contrast non-food items continued to drop, recording their poorest quarterly results - even adjusted for online sales - for over four years.

"The overall performance last month was positive but could well prove short-lived. Retailers are grappling with several recent cost increases which are now really starting to take hold and which ultimately will affect margins and so their ability to invest.

"It will be a struggle to pass on these cost rises to increasingly cash-conscious shoppers, who are having to contend themselves with rises in inflation and council tax and measly real terms growth in wages."

Craig Cavin, KPMG Head of Retail in Scotland, said: "It seems consumers placed festive feasts with friends and family at the heart of their Easter holidays, with grocers benefiting from a surge in food sales.

"However, this growth is likely to be heavily distorted by both the relatively late Easter and price inflation creeping into the mix. This jump may also be the reason that the three-month growth for food sales was at its highest since September 2013.

"Elsewhere, non-food retail sales were disappointing. Despite Easter, sales fell by 0.8% year-on-year. Clearly bargain hunters seeking big-ticket items like furniture and white goods were not out in force, leaving retailers without the boost they may have expected."