Scottish retail sales grow for first time since June

Retail sales, buoyed by the early Easter break, grew last month for the first time since June, figures have shown.

Sales of home accessories, health and beauty, home textiles, and toys were boosted during the five weeks between February 25 and March 30, according to the Scottish Retail Consortium (SRC).

But the SRC warned that traders faced “continuing pressures”.

Data from the SRC-KPMG Scottish retail sales monitor showed that total sales increased by 2.8% compared with March 2023, above the three-month average increase of 2.1% and below the 12-month average growth of 5.2%.

When adjusted for inflation, year-on-year growth was 1.5%.

Categories such as DIY, garden furniture, and household appliances fared less well over the Easter period, data showed.

Retailers’ costs will increase in April with the minimum wage due to go up, along with business rates for larger shops, retail experts warned.

Ewan MacDonald-Russell, deputy head of the Scottish Retail Consortium, said: “One swallow doesn’t make a summer, but these positive figures for March are a balm for retailers in Scotland after many months of difficult trading.

“Data shows a pick-up in demand across food and non-food, with the total value of retail sales, once adjusted for shop price inflation, growing for the first time since last June, buoyed by the early Easter and associated improvement in footfall.

“Sales of home accessories, home textiles and health and beauty performed well, as did grocery and toys. In contrast, DIY, garden furniture, and household appliances fared less well.

“Enthusiasm over March’s sprightlier results is understandable after a sustained and difficult period.

“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. Real terms growth in wages, the easing of shop price inflation, the freeze to council tax and reductions in employee national insurance contributions should all help.”

Sales increased by 2.1% compared with March 2023, when they rose by 6% – above the three-month average of 1.4% and below the 12-month average growth of 4%.

Total non-food sales increased by 0.9% in March compared with March 2023, when they increased by 4.1% – above the three-month average decrease of 0.1% and below the 12-month average growth of 2.1%.

Linda Ellett, UK head of consumer, retail and leisure at KPMG said: “After a tough start, an early Easter showed total sales in Scotland increasing by 2.8% in March.

“Whilst this seems disappointing compared to the increase of 8.8% last March, this was above the three-month average increase of 2.1% and, when adjusted for inflation, is a positive 1.5% year-on-year growth.

“High street sales growth was driven by food and drink, health and beauty and gardeners who headed outside to enjoy the first days of spring. Categories started to see positive sales growth in March for the first time in months.

“As April signals big increases in the sector’s cost base, through the rise in minimum wage and business rate hikes for larger high street brands, retailers will be hoping the bounce back 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, households continue to keep a close eye on where their tight budgets are being spent.

“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.”