Scottish consumers maintained cautious spending habits in September, prioritizing essential purchases. However, the highlight of the month was the remarkable performance of the fashion and clothing sector, which outshone previous months. Shoppers eagerly stocked up on autumn wardrobe essentials, possibly influenced by the cooler weather in Scotland compared to other regions.
A note of caution was sounded, suggesting that the upcoming holiday season could be one of the most critical ‘golden quarters’ in recent memory.
In the five weeks ending on September 30, total sales in Scotland showed a strong year-on-year increase of 6.1%, slightly below the 6.5% recorded in the same month last year. Nevertheless, this figure exceeded the three-month average growth of 5.5%, though it fell short of the 12-month average of 8.4%. Adjusted for inflation, the year-on-year decline was only 0.1%.
Non-food sales in Scotland rose by 3.5% compared to the previous September, slightly below the 3.9% increase recorded the previous year. However, this figure outperformed the three-month average growth of 2.6%, even though it remained below the 12-month average of 5.1%. When accounting for the estimated impact of online sales, total non-food sales increased by 1.9%, down from a 3% rise in the previous year.
Ewan MacDonald Russell, Head of Policy & External Affairs at the Scottish Retail Consortium, noted that these figures portrayed a more positive picture compared to the rest of the United Kingdom, partially due to seasonable weather. He emphasized that consumers remained hesitant to purchase full-priced items, preferring to buy when discounts were available. Larger or high-value items such as furniture and electrical products struggled, reflecting subdued consumer confidence.
Looking ahead, challenges persist for retailers, particularly as households confront higher winter energy bills alongside existing expenses. The key will be to maintain sales without resorting to early discounting ahead of the Christmas season. Government policies can assist by safeguarding the spending power of modest and less affluent Scottish households.
Paul Martin, Partner, UK Head of Retail/KPMG, highlighted the impact of inflationary pressure on sales, causing a growing divide between the strongest and weakest players in the retail industry. The battle for Christmas shoppers is expected to be intense, with pricing playing a pivotal role in purchasing decisions.
