Page last updated at 07:47 GMT, Wednesday, 17 February 2010

Scottish spending 'hit by wintry weather'

Shoppers on Buchanan Street
Many shoppers made their big purchases before the rise in VAT

Wintry weather changed consumers' spending habits during January, according to the Scottish Retail Consortium.

The lines that did well included boots, warm bedding, spades and grit, while people also stocked up on tinned and frozen food.

But consumers pulled back on other, optional spending.

And some chose to make their major purchases in December, before the VAT rate returned from 15% to to 17.5%.

This led to more subdued spending in January, the survey found.

The end result from the Scottish Retail Consortium (SRC) figures was a "dramatic" fall in spending in some categories, and what the industry called the worst January for Scotland's major shopkeepers for four years.

After a decent December, this is a disappointing result, but not a disaster
Richard Dodd
Scottish Retail Consortium

The total sales level was, however, more than twice as strong as the British Retail Consortium's figure for the whole of the UK.

The total SRC sales figure saw all sales rise by 2.8%, with the UK figure at 1.2%.

For two years, food inflation has contributed to food bills outpacing others, and that bill rose by 4.8% between January 2009 and January 2010.

Non-food sales only rose by 0.9% on the year before, when consumer confidence had been extremely low.

The industry measure of like-for-like sales only includes shops that traded throughout the 12 month period, and all sales from them fell by 0.6%.

Food sales were up only by 0.8% and non-food down by 1.8%.

Following a Christmas splurge, in which recession-weary Scots bought more expensive food ranges, there were some signs of returning to value ranges.

The winter weather meant more people shopped for food online, using supermarket delivery services.

'Weak performance'

In clothing and footwear, boots sold best, along with coats, jacket and warm accessories.

Richard Dodd of the SRC said: "After a decent December, this is a disappointing result, but not a disaster. Generally, people just didn't want to go out shopping in the extreme weather if they didn't have to.

"Food sales did well early in the month, as people stocked up and demand for winter wear took clothing to its best result since last April, but there was much less interest in things like homewares and DIY.

"Scottish retailers will be hoping January's weaker performance is mainly about the weather rather than anything more fundamental."

David McCorquodale, head of retail in Scotland at consultants KPMG, said the slump in non-food sales had been "dramatic".

"While the return to a VAT rate of 17.5% was still to be implemented by many high street retailers and its effect was arguably marginal, the poor weather experienced by the vast majority of the UK probably had a more telling effect," he said.

"With Scotland under a deep blanket of snow for nearly two weeks, any momentum being carried through the January sales from the run-up to Christmas came to a grinding halt".



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