Across the UK, the overall retail picture isn’t that bad. But the further north you go, the worse it gets

Across the country as a whole, retail is plodding along OK. As one top fashion retailer summed it up to me this morning, “No fireworks, no disasters.” But the overall picture masks some increasingly wide regional variations, with retailers saying that the south east and London in particular are holding up well, while the further away from the capital you go, the worse the picture gets.

Lots of anecdotal evidence to that effect was confirmed today when the BRC revealed the weakest sales growth in Scotland for over a decade and the worst like for likes since 2000 too, excluding Easter adjustments. These are really bad figures, and they also reveal that total non-food sales actually fell over the month of July, with the overall total only moving into positive territory thanks to food.

Scotland didn’t benefit from a really warm and dry July like much of the rest of the UK, and that inevitably hit fashion sales. But there has to be a bigger explanation than that, and people who know Scotland much better than me are of the view that the fear of job cuts in the public sector is spooking shoppers and putting them off non-essential purchases.

It’s a fact that the further away from London you go, the higher the proportion of the workforce are employed by the public sector. Northern Ireland and the northeast of England also have particularly high concentrations. The worrying thing is that the job cuts haven’t started yet, and when they inevitably do come it’s likely to be a long and very high profile process. That’s when the real impact on retail could begin to be felt.

It might be though that David Cameron is managing expectations and the cuts won’t be as bad as he’s prepared us for, or that once those keeping their jobs know that they are safe, they’ll start spending again. Ironically, Philip Green’s government efficiency crusade may end up having an impact.

But while nothing is certain, judging by what’s hapenned since the new government was elected, the prospects for the retail scene north of the border in the medium term don’t look too good.

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