Fall in retail sales shows consumers tightening belts, report says

SCOTTISH consumers have started to “tighten their belts” with a fall in retail sales last month, figures show.

Food sales increased in February but overall Scottish sales declined by 1.9% compared to the same month in 2016.

The Scottish Retail Consortium (SRC) said 2017 had “got off to a somewhat sluggish start” for retailers with a successive month of falling sales.

Experts believe consumers are responding to a combination of moderate wage growth and rising overall inflation, with council tax set to increase in some areas as well.

SRC director David Lonsdale said: “In recent months we’ve seen a polarisation in the performance of food and non-food categories; which continued in February.

“Food sales continued to edge up, helped by good sales of wine and chocolates for St Valentine’s Day as well as stronger demand for grocers’ meal deals; which perhaps hints at less eating out during the period as consumers reined in spending.

“By contrast, non-food categories fell back once again, particularly clothing, footwear and household appliances, though there was continuing interest in mobile phones, wearable technology and a revival in gaming products.

“These figures suggest Scottish consumers are maybe beginning to tighten their belts and acknowledge the strain from rising overall inflation and moderating wage growth, with council tax set to creep up soon too.”

Craig Cavin, head of retail in Scotland at KPMG, said: “February put an early spring in the step of food retailers, with like-for-like sales up 2.3% after being adjusted for 0.4% food inflation.

“However, they were the exception to the rule as total Scottish retail figures flagged behind 2016 for the second month running.

“Non-food numbers continue to alarm, with the early sales instigated by retailers in November and December weighing heavily in 2017.

“In a troubling sign, non-food numbers adjusted for online sales were in the red for two consecutive months – something which did not happen in 2016.

“Half-term holidays meant families spent time together last month but it seems this break was not spent on the High Street, as clothing and footwear sales fell.”