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Scottish retail trend remains positive despite Easter distortion

In April 2013 total Scottish sales decreased by 2.1% compared with April 2012 when they had decreased by 4.1%, according to the SRC/KPMG Scottish Retail Sales Monitor published today.

Continuing the comparisons, like-for-like sales decreased by 3.0% when they had decreased by 5.2% in April last year.

Taking account of shop price inflation at 0.4%, April total sales were down 2.5% in real terms. Total food sales were 1.4% down on April 2012, when they had declined 0.7%.

A narrative released with the figures states that this is the worst outcome since the series started in January 1999 but it does stress that the figures are likely to be heavily distorted by the timing of Easter, which fell in April last year versus March this year.

Total non-food sales declined by 2.7% on a year earlier when they had decreased by 7.3%. Fashion continued to be affected by the prolonged cold weather.

The 3-month and the 12-month average growths for Scotland remained positive, both at 0.3%, but below those of the UK, at 2.6% and 2.5% respectively.

Fiona Moriarty, Director of the Scottish Retail Consortium, said: "A double whammy of factors beyond retailers' control are the main causes behind what looks like a very disappointing set of results at first glance. The cold and unseasonal weather outstayed its welcome longer than other parts of the UK, so demand remained cool for Spring and Summer ranges, especially in the clothing and footwear category. And the timing of Easter weakens the figures further – it fell in March this year but April the previous year, meaning that many categories suffered against a strong 2012 comparative, particularly food."

"But it's not as bad as it looks. If you strip out the Easter distortions, April sales growth was actually a slight improvement on March, and the overall three month average is still marginally up on the same period in 2012."

"The figures don't yet reflect it, but we're seeing very tentative signs that the mood is starting to lift, especially consumer confidence which has crept above the UK average for the first time since September. Retailers will be hoping that the Bank Holidays and warmer weather in May will return a better set of results and boost this fairly subdued three month average into more positive territory."

David McCorquodale, Head of Retail, KPMG, said: "April's figures provide a dose of realism to remind us how tough the retail environment remains in Scotland. On the back of the strongest first quarter to a year since 2011, the latest drop in sales is disappointing. However, it is worthwhile noting the clear distortion caused by this year's early Easter, which boosted March's figures and suppressed April's relative to the same time last year."

"Considering performance on a three month rolling basis to account for this Easter discrepancy, total food sales actually increased by 2.2 per cent, roughly in line with the rest of the UK. Given the necessity of food this is perhaps unsurprising but positive compared to non-food sales which lagged behind the rest of the UK by 4 percentage points."

"Looking ahead, sales at the till will remain hard-fought for, with promotional activity squeezing margins, as retailers' anxiety grows around ensuring the first quarter's stronger performance continues. Now that we're into May, retailers will also be looking skyward in the hope the wetter weather stops and sales prospects of summer fashions and gardening products improve."

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