Scottish retail sales are reported to be growing at the lowest rate since March 2006. This slowdown is mainly due to reduced expenses of customers and less number of relocations.
According to The Scottish Retail Consortium, in September 2008, the annual growth rate of Scottish retail sales recorded the slowest rate since March 2006, and an annual drop was also seen in the non-food category, as per the news published by theherald.
In September 2008, the total retail sales (in value terms) in north of the border closed at 4.6% up from the same period last year. Because of a 2.1% annual increase recorded in March 2006, the total growth in sales cannot be regarded so weak.
Further, as compared to September 2007, the sales of non-food came down by 0.6% in September 2008. The non-food sales saw a year-on-year decline of 3.9%, regardless of heavy discounting.
The key reason for the slowdown in growth in retail sales is that the consumers are cutting down their discretionary expenditure as the global financial crisis has started affecting the economy. Also, the declining confidence of consumers and the pressure on household budgets are clearly responsible for this decline in overall consumer expenditure.
Moreover, electrical goods witnessed poor sales in September 2008 since very few of the people moved houses. As a result, little amount was spent on renovations and costly electrical items like refrigerators. The floor coverings, in both big projects like kitchens and bathrooms, and on small projects, were also affected severely due to same reason. Clothing also witnessed an annual fall in growth.
Furthermore, in food stores, winter delights like soups, root vegetables and roasted meats performed well as promotions and discounts attracted the customers.
After the worst performance of the Scottish shops, retailers are hoping of a fast recovery. As the Christmas is fast approaching, the Scottish retailers will be very nervous, waiting for positive results to come.
According to a Research Analyst at RNCOS, “Scotland’s retail industry recorded a slump in growth in September 2008, because of the weakening consumer confidence. However, trading was fractionally better than the remaining regions of the UK, but conditions are still not completely in the favor of retailers. And now since the Christmas is around the corner, retailers may get some relief.”
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