Retail sales growth in Scotland has outstripped the rate of inflation for the first time in nine months, indicating that shoppers are choosing to spend a bit more rather than just being forced to pay higher prices for the same goods.
Latest figures released this morning by the Scottish Retail Consortium (SRC) show that total sales rose by 2.8% during the five weeks to March 30. After adjusting for inflation, sales were up by 1.5%, the first time that figure has been in positive territory since June of last year.
Ewan MacDonald-Russell, deputy head of the SRC, said the figures are a balm for hard-pressed retailers in Scotland after "many months" of difficult trading. Health and beauty, home accessories and home textiles all performed well, as did grocery and toys as shoppers prepared for Easter and the school break.
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However, he also cautioned that "clearly one swallow doesn't make a summer".
“Enthusiasm over March’s sprightlier results is understandable after a sustained and difficult period for Scottish retail sales," he said. "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.”
The figures come after footfall data released last week by the SRC showed the period to March 30 to be the "least worse" for consumer visits to the shops since last November. The improvement was felt across all retail destinations with Glasgow putting in its best performance since July 2023, and Edinburgh recording a “solid month of footfall growth”.
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Linda Ellett, head of UK retail at accountancy group KPMG, said today's figures might seem disappointing compared to the 8.8% increase in the same period last year. However, the return to a positive inflation-adjusted reading is encouraging, as is the return of sales growth across an increasing variety of goods.
“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 bounce back of March sales is more than just an Easter blip," she said.
"Economic indicators are heading in the right direction with inflationary pressures easing and interest rates having potentially peaked, however consumer confidence remains fragile and households continue to keep a close eye on where their tight budgets are being spent."
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