Retailers are facing the “biggest crisis in two decades” after the “worst-ever” December trading, the Scottish Retail Consortium (SRC) has claimed.
The stark figures came amid fears businesses in the country could miss out on almost £1 billion in lost revenues during the current lockdown.
New analysis, conducted by financial services company KPMG, found that sales on Scotland dropped by 14.8% compared on the previous year, adjusted for inflation.
Although more food was purchased, with an increase of 3.3% on December 2019, the sales of other items went down by 33.4%.
Yesterday, administrators at the Arcadia retail empire announced another 31 of its shops will be shut by the end of the month, with the loss of 714 jobs.
It is understood that in the latest series of cuts, all 21 of the group’s Outfit shops will close, including one in Aberdeen.
Elsewhere in Aberdeen, the Bon Accord centre said will shut to the public from January 28, although the essential shops within the premises will remain accessible.
Yesterday, First Minister Nicola Sturgeon confirmed that Covid restrictions preventing many retailers from opening the doors of their shops would continue into next month.
John Pascoe, chairman of the Rediscover Peterhead business improvement district, said: “Despite government assistance for business in general, it has been a matter of survival for a lot of businesses since March last March, and the further extension of the Level 4 lockdown makes this even more challenging.
“Many businesses have survived by developing an online and or ecommerce presence, we hope that this will also assist strengthening their trading ability when society returns to normality.”
And business improvement district Aberdeen Inspired’s chief executive Adrian Watson added: “The lockdown extension announcement today was expected and while we fully respect and understand the rationale, it is having a huge impact on so many of our businesses across a multitude of sectors.”
David Lonsdale, director of the SRC, said: “Scotland’s retailers are in the depths of the biggest crisis in two decades after the worst-ever December trading.
“Retail sales fell in real terms by 15%, the worst since June, as lockdowns at the start and end of the month snuffed out hopes of a late rally to end the year.
“Food sales remained positive but recorded their second weakest monthly performance since the spring, underwhelming considering the lack of competition from eateries.
“Non-food sales from stores slumped dramatically, by over a third compared to the same period the previous year.
“Closed stores for much of the month coupled with the loss of the post-Christmas discounting period clobbered non-food shops, removing the final chance for them to tempt customers and shift unsold stock.”
The SRC has estimated that Scottish shops could miss out on almost £950m of lost revenues as a result of the current lockdown period.
It is a further blow for retailers, despite the encouraging news that lockdown restrictions were helping to ease the number of people diagnosed with coronavirus across the country.
And preparations have begun to transform the P&J Live in Aberdeen into a mass vaccination centre, which will be built to carry out 20,000 vaccinations to the north-east each week when up and running.
Some retailers have been able to adapt relatively successfully with the various lockdown restrictions.
Ian Cukrowski, director of the MacBeans coffee and tea shop in Aberdeen’s city centre, said with more people working at home, the shop has been busy fulfilling orders for click and collect.
He said: “We were quite fortunate in that we had our website up and running in the first lockdown.
“And with people working at home and not going to coffee shops, things have come into alignment for us, so we’ve found ourselves in a fortunate position.
“We were fully expecting this lockdown to be extended, and it will be very hard on an awful lot of small businesses.
“It’s debatable how many will be able to last, it all depends on the financial support.”
And the owner of a women’s clothes shop in Moray is using the second lockdown to consider new avenues to sustain the business.
Lossiemouth-based Unique faces nearly another month with its doors with the rest of the Scottish retail sector.
Last year the store coordinated local efforts to make scrubs for NHS workers with more than 100 garments transformed from duvets.
Yesterday owner Maureen Halkett was using the current downtime to complete the annual stocktaking process.
However, the businesswoman has also been using the lockdown to consider new avenues to take the store after a quiet December.
She said: “I’m looking to diversify and change the business model, just to see if there’s a different market or merchandising opportunity we could use – something that’s totally different to give me the encouragement to keep going.
“We’ve also been using this time to look at how we might increase what we offer in terms of a website.
“Keeping track of funding opportunities has also been a bit of a minefield. It’s been tough to find something that specifically applies to your circumstances.
However, despite the rise in Covid-19 cases in Moray and across Scotland, there have also been heartening signs of support from the Lossiemouth community.
Mrs Halkett, who is also chairwoman of the Lossiemouth Business Association, said: “It was very quiet during December, but there have been some signs of encouragement.
“We launched a Lossiemouth gift voucher scheme a few years ago and this year the response was really phenomenal, there was a massive uplift.
“It really shows that the community really cares about keeping money local and supporting the businesses that we have.”