Scotland’s retail sales return to pre-Covid levels but ‘storm clouds’ ahead

Shop sales in Scotland have returned to pre-pandemic levels, according to Scottish Retail Consortium (SRC) figures though part of the upturn is due to rising prices rather than sales volumes.

The regular Scottish retail sales monitor found that overall sales in Scotland last month were up by 0.6 percent when compared with March 2019 – with like-for-like sales up by 0.7 percent when compared with three years ago.

But while retail chiefs said sales figures for March had “sparkled”, they warned the sector still faced “economic storm clouds”, with rising inflation likely to have “significant implications”.

Total food sales for March 20220 were up by 6.0 percent when compared with the same month in 2019 – but Ewan MacDonald-Russell, the head of policy at the SRC, said the improved figures were “at least in part” down to rising shop prices.

while food sales had increased, total non-food sales fell by 3.9 percent when compared with March 2019.

“March sales sparkled compared to recent months as shoppers returned to spending,” MacDonald-Russell said.

“This is the first time sales have been close to pre-pandemic levels since the Covid crisis hit and coincides with the removal of nearly all Scottish Covid restrictions.”

“These improved figures are at least in part a result of rising shop prices as retailers grapple with a host of inflationary costs.

MacDonald-Russell added that whilst these sales figures are encouraging, the economic storm clouds continue to concern retailers.

“Costs continue to rise and will worsen in April as non-domestic rates bills return for many retailers.

“Rising inflation means prices are likely to continue rising, which will put immense pressure on households discretionary spending which has significant implications for many retailers.”

Reacting to the recent figures, Paul Martin, the head of retail at KPMG, stated that Retailers will be glad to see sales in Scotland reach pre-pandemic levels, it’s too early to call this a “return to normality” given the cloud of geopolitical and macro-economic uncertainty which has the potential to “dampen consumer confidence and spending power in the months ahead”.