Scottish Government urged to support businesses after November sales slump

The Scottish Government has been urged to support businesses in this week’s Budget after figures revealed a slump in retail sales last month.

Total sales in Scotland were down 2.9% in November when compared with the same period last year, according to the SRC-KPMG Scottish retail sales monitor.

Adjusted for inflation, that amounts to a 2.3% year-on-year reduction in sales.

Sales had risen in 2023 by 3.1% when compared with 2022 but the last 12-month average showed total sales declining by 0.3%.

Food sales increased by 0.6% in November compared with last year – a rate much slower than the 5.8% reported in 2023.

Non-food sales saw the biggest hit, declining by 5.8% when they had increased by 0.9% the year before.

The Scottish Retail Consortium (SRC) said that adjusted for the estimated effect of online shopping, non-food sales shrunk by 10.8%.

The group said the impact of Black Friday, which will be reported with December’s figures, “may make up a little ground” for struggling retailers.

It said that health and beauty products, including beauty advent calendars, had proven popular, alongside Christmas trees and energy-efficient products.

But technology and fashion had underperformed, and consumers were holding back on festive spending amid discounts in the run-up to Black Friday, it added.

The industry trade group has said business owners across the country will be watching this Wednesday’s Scottish Budget with “significant trepidation”.

Ewan MacDonald-Russell, deputy head of the SRC, said: “Scottish retail sales slumped by 2.3% in real terms in November as the mid-month of the golden trading quarter disappointed.

“With retailers already reeling from the enormous bills coming out of the UK Budget and the bitter arctic weather, the poor trading performance will have alarm bells ringing for many.”

During Chancellor Rachel Reeves’s Budget, she announced rises to the minimum wage as well as increases to employers’ national insurance, increasing the cost of doing business.

Mr MacDonald-Russell said prices are expected to rise further as a result of government decisions.

He added: “Scotland’s retailers are already facing a £190 million cost next year from the changes to employer national insurance.

“They will be nervously looking towards Wednesday’s Scottish Budget with very significant trepidation.

“Bluntly, consumers are already likely to see prices rise in the new year due to rising government-mandated cost pressures, whilst jobs and shops are at risk.

“If the Scottish Government choose to increase costs further through new levies or large business rates increases, it’s Scotland’s shoppers who are likely to face the price in 2025.”

Scottish Labour and the Conservatives have urged the Scottish Government to pass on the 40% rates relief for retail, hospitality and leisure venues seen in England.

The Tories also want 100% rates relief introduced in Scotland for pubs and restaurants.

Finance Secretary Shona Robison said: “The Scottish Budget will prioritise funding to deliver on the First Minister’s priorities, which include growing the economy.

“Concerns have been raised with the UK Government around the rise in employer NICs, which risks hampering economic growth.

“Decisions on fiscal policy including non-domestic rates for next year will be considered in the context of the Scottish Budget 2025-26.

“The 2024-25 Scottish Budget delivers a competitive non-domestic rates regime including the lowest poundage in the UK for the sixth year in a row, and a package of reliefs worth £727 million as at June 1 2024.

“Our Small Business Bonus Scheme remains the most generous of its kind in the UK.”