SRC: Inflation Suppresses Scottish Sales in March

Inflation Suppresses Scottish Sales in March

Sales figures are not adjusted for inflation. Given that both the March SPI (BRC) and February CPI (ONS) show inflation running at historically high levels, a portion of the sales growth will be a reflection of rising prices rather than increased volumes.

Covering the five weeks 26 February – 1 April 2023

• Total sales in Scotland increased by 8.8% compared with March 2022, when they had grown 35.6%. This was below the 3-month average increase of 9.0% and above the 12-month average growth of 7.6%. Adjusted for inflation, the year-on-year change was -0.1%.
  
  
• Scottish sales increased by 6.0% on a Like-for-like basis compared with March 2022, when they had increased by 28.5%. This is below the 3-month average increase of 6.8% and above the 12-month average growth of 5.4%.
  
  
• Total Food sales increased by 14.3% versus March 2022, when they had decreased by 3.8%. March was above the 3-month average growth of 13.0% and the 12-month average growth of 8.9%. The 3-month average was above the UK level of 8.5%.
  
  
• Total Non-Food sales increased by 4.1% in March compared with March 2022, when they had increased by 68.6%. This was below the 3-month average increase of 5.5% and the 12-month average of 6.5%.
  
  
• Adjusted for the estimated effect of Online sales, Total Non-Food sales increased by 3.4% in March versus March 2022, when they had increased by 49.1%. This is below the 3-month average growth of 4.4% and the 12-month average of 4.1%.

Ewan MacDonald Russell, Deputy Head | Scottish Retail Consortium

“Scottish retail sales remained flat in March with a miniscule drop by 0.1 percent in real terms on the previous year. The eight percent rise in sales was more than offset by increased inflation as the cost of living continues to increase for hard-stretched households.

“The figures show consumers cutting back on discretionary spending to focus on essentials, with food sales rising by over 14 percent compared to 2022; which is still a real terms fall in spending. Consequently, high street retailers continue to find trading challenging with shoppers spending focused on sales and discounts.

“Retailers will hope Easter brings a small boost. However, the outlook remains very difficult for all businesses. In these circumstances any new costs imposed on businesses will be passed directly to consumers. Therefore we hope to see the Scottish Government focus on making growing Scotland's economy the priority of priorities rather than adding to that cost burden."

Paul Martin, Partner, UK Head of Retail | KPMG

“As inflation continues to offset any true sales growth in Scotland, and the cost of living crisis continues to bite, the picture for the retail sector remains stagnant as we approach the summer months.

“High street retailers saw some limited growth across most categories in March but consumers are actively cutting back and instead spending more on home comforts. Rising utility costs, council tax and mobile bills coupled with frozen personal tax rates and the withdrawal of energy bill support will see consumers having to further curb discretionary spending as we move through April.

“Of course, some retailers are delivering growth and will be optimistic of their performance, although this is largely down to taking share from competitors through customer insights and innovation rather than any overall growth. The challenge for retailers now is having to face into their own rising cost agenda, as inflation continues to challenge margins, whilst ensuring affordability, choice and value for customers.”