Scottish retail sales 'sprightlier' in March, but outlook remains cautious, according to SRC-KPMG report

The latest retail sales monitor from the Scottish Retail Consortium (SRC) and KPMG for the period spanning February 25 to March 30, found that total sales in Scotland were up 1.5 per cent year on year when adjusted for inflation, and buoyed by the early Easter. The figure was 2.1 per cent on a like-for-like basis, above the three-month average jump of 1.4 per cent and below the 12-month average growth of 4 per cent.

Total food sales grew by 5.1 per cent versus March 2023, above the three-month average growth of 4.5 per cent and below the 12-month average growth of 8.9 per cent. Total non-food sales stepped up by 0.9 per cent, and adjusted for the estimated effect of online sales, expanded by 0.1 per cent, above the three-month average decline of 1.4 per cent, and below the 12-month average growth of 0.8 per cent.

SRC deputy head Ewan MacDonald-Russell said: “Clearly one swallow doesn’t make a summer, but these positive figures for March are a balm for hard-pressed retailers in Scotland after many months of difficult trading. Sales of home accessories, home textiles, and health and beauty performed well, as did grocery and toys as Scots readied for Easter and the school break. In contrast DIY, garden furniture, and larger household appliances fared less well.

“Enthusiasm over March’s sprightlier results is understandable after a sustained and difficult period for Scottish retail sales. However, this needs to be tempered given continuing pressures on retailers’ outgoings, and the fact that some Easter-related purchases will have been pulled forward into March. It’s too early to say Scottish retail sales have turned the corner. However, the continued real-terms growth in wages, the easing of shop price inflation, and the freeze to council tax and reductions in employee national insurance contributions should all help support future demand.”

Also commenting was Linda Ellett, UK head of consumer, retail and leisure at KPMG, who said an early Easter “showed the green shoots of spring” sales-wise after a tough start to the year, and with more categories starting to see growth for the first time in months. She added: “As April signals big increases in the sector’s cost base – through the rise in minimum wage rates and business rate hikes for the larger high-street brands – retailers will be hoping that the bounceback of March sales is more than just an Easter blip.

"Economic indicators are heading in the right direction with inflationary pressures easing and interest rates having potentially peaked, however consumer confidence remains fragile… It remains a challenging environment, but as we head into the warmer months retailers will be hoping that stronger consumer confidence will turn into stronger retail sales, especially in more discretionary categories such as clothing, following an incredibly difficult few years."

Recent SRC-Sensormatic IQ data by contrast showed that shopper footfall north of the Border fell in March for the sixth consecutive month, but was down just 0.9 per cent year on year.