Scottish retail edges closer to pre-pandemic levels

During the pandemic much of retail bounced between being open and closed, significantly impacting sales and changing consumer behaviours. In January 2021, Scottish retail was in lockdown, pushing many consumers to buy goods online. In this context, all comparisons are provided on a year-on-2-year (Yo2Y) basis, we have also included comparisons with January 2021 (YoY), where relevant. This will be clearly signposted below. 

Sales figures are not adjusted for inflation. Given that both the January SPI (BRC) and December 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 four weeks 2 - 29 January 2022 

• Total sales in Scotland decreased by 7.9% compared with January 2020, when they had increased by 1.3%. This was above the 3m average decrease of 11.6% and the 12-month average  decrease of 10.8%. 

• The January performance is an improvement of 5.1 percentage points from December 2021 and is the lowest Yo2Y decline recorded since July last year. 
  
  

• Scottish sales decreased by 3.0% on a Like-for-Like basis compared with January 2020, when they had decreased by 0.1%. This is above the 3-month average decrease of 10.1% and the 12-month average decrease of 8.1%. 
  
  

• Total Food sales increased 3.3% versus January 2020, when they had increased by 2.7%. January was below the 3-month average growth of 3.5% and the 12-month average growth of 4.3%. The 3-month average was below the UK level of 8.1%. 
  
  
• Total Non-Food sales decreased by 17.3% in January compared with the same month in 2020, when they had increased by 0.2%. This was above the 3-month average decrease of 24.2% and the 12-month average decrease of 23.5%. 
  
  
• Adjusted for the estimated effect of Online sales, Total Non-Food sales decreased by 34.0% in January versus the same month in 2020, when they had increased by 1.1%. This is above the 3-month average decline of 36.9% and below the 12-month average decrease of 22.1%.  

Ewan MacDonald-Russell, Head of Policy | Scottish Retail Consortium 

“January saw the best Scottish sales figures in six months as shops kicked off 2022 with tentative signs of a recovery. Whilst these figures are littered with caveats – the value of sales remain nearly eight percent below pre-pandemic figures and are bolstered by inflation – it’s nonetheless welcome to see an improving performance after a dreadful end to 2021. 

“Food sales fell back into negative territory compared to last year, hardly surprising considering Scotland was locked down with eateries shuttered, but were 3.3 percent up on 2020. However, much of that growth derives from increased inflation which grocers are now being forced to pass onto customers through higher prices.  Non-food sales were quite positive with childrenswear, men’s smart clothing, and furniture all performing well.  

“It’s too early to tell if this is the start of a shopping revival in Scotland, but these figures will provide a little respite for a shattered retail industry. Nonetheless, there are immense headwinds battering stores right now, with high inflation, rising public policy costs, and stretched household finances all making trading difficult. Hopefully there will be brighter skies ahead, but it looks it will be sometime until we arrive there.” 

Paul Martin, Partner, UK Head of Retail | KPMG 

“An encouraging start to the year is welcome news, but with inflation impacting both consumers and retailers, the months ahead will require a balanced approach to drive growth. There are clear signs we’re edging closer to traditional trading patterns and sales falling back into line with pre-pandemic levels. Normally a quiet trading month, January’s strong performance was fuelled by non-food sales, with notable performers including formal office wear, mirroring the return to the office for many. 

“It remains to be seen if sales will continue to grow and move towards levels we saw before the pandemic. Scottish households will be feeling the pinch in the months ahead, with rising energy and fuel prices being compounded by inflation which is due to peak in April. Retailers are facing their own inflationary pressures and will need to take tough decisions on whether and how to pass on the increased costs they have been sitting on for some time to consumers facing their own financial challenges.  We could easily see the health of the sector start to deteriorate if consumers choose to sit on savings to weather the storm.”