Latest industry figures suggest that Scottish retail sales fell overall by 2.3% in June 2018. Although food sales increased by 0.8%, non-food sales – in particular, fashion sales – had suffered a decrease throughout the year.
Ewan MacDonald Russell, Head of Policy for the Scottish Retail Consortium (SRC), commented that there was a “clear trend” in a decline of consumer spending over the last few months. He continued to suggest that Brexit was dominating reasons why this was the case, saying “The consequence of the unending Brexit gridlock and stagnation is reduced confidence among retailers and consumers.”
There is concern in the retail industry that deeper problems may be on the horizon with Brexit on track to either extend beyond October 31st (which would deepen the uncertainty even further than current levels), or the potential that Britain may even crash out without a deal at Halloween. This could cause significant damages in overseas trade, and with Christmas around the corner, retail prices could be forced to shoot up due to imports having far more bureaucratic roadblocks in place following the UK’s exit from the European Union.
Another signal for Scotland’s current decline is the slump of AG Barr’s stock following a warning that profits could fall.
This is the company that produces Irn Bru, a significant cultural icon for Scotland. If such an emblematic firm were to hit problems, then that might mean a significant blow to consumer confidence in Scotland, which would then lower sales, further hitting confidence. Even now, fashion sales continue to be “quite poor”, with retailers reporting even discounted products “underperforming expectations” and high-street retailers failing to record profits in such a manner which is symptomatic of the cycle perhaps already being in progress.
However, there may be some hope on the horizon for Scottish businesses. Scottish employment rates continue to rise, along with wages themselves growing and more disposable income in people’s pockets meaning more money that can be spent on retailers across the nation. Furthermore, the government has recently announced the Borderlands Growth Deal, and the Moray Growth Deal, both of which will encourage these areas to develop, with effects rippling across the country. Although currently, Scotland seems to be in a downturn, firms need to look to the future, as if they’re able to ride out this storm, there is a promising horizon ahead of them.