Non-food sales in Scotland fell last month at their fastest annual pace since November 1999, a most inauspicious start to the key festive trading period, an industry survey reveals today.

The survey from the Scottish Retail Consortium shows that non-food sales in November were 3.9% weaker than in the same month last year.

Tough trading was reported by retailers across the clothing, footwear, furniture and floorcoverings, homewares and do-it-yourself, and health and beauty sub-sectors. Discounting failed to encourage consumers to spend freely amid the growing economic gloom.

Even including the more solid food sector, annual growth in Scottish retail sales value slumped to a two-and-a-half-year low in November.

The like-for-like measure, which strips out net expansion of shop space to give a measure of how retailers are faring as opposed to overall consumer spending, showed the greatest year-on-year fall since 2000.

The SRC survey shows that Scottish retail sales value in November was 2.8% higher than in the same month last year, down sharply from 4.5% year-on-year growth in October and the weakest rate of increase since March 2006. The March 2006 figure was affected by the timing of Easter.

Year-on-year growth in sales was running at 8% as recently as May this year.

Only a 10% year-on-year jump in the food category enabled the annual increase in total retail sales north of the border last month.

On the like-for-like measure, sales in November were down 0.8% on the same month last year. This was the worst year-on-year comparison since August 2000.

In October, sales had been up 0.1% year-on-year on a like-for-like basis. Non-food sales were down 5.3% year-on-year on a like-for-like basis in November, the biggest annual drop since 1999.

Fiona Moriarty, director of the Scottish Retail Consortium, said: "There's no evidence yet of the spending boost most retailers expect in the last two months of the year. Hard-pressed customers are certainly continuing the trend of recent years and leaving Christmas shopping late and, with people nervous about their own future finances, bargain-chasing is widespread.

"In the end customers will spend for Christmas but, even with VAT (value added tax) cuts and more continued heavy discounting, the omens for December sales being up on last year don't appear favourable."

Chancellor Alistair Darling cut the VAT rate from 17.5% to 15% from December 1 in an attempt to kick-start the struggling economy.

Moriarty continued: "I think the current trading period needs to be set against what has been a difficult 12 months and what we have seen over the last month-and-a-half is quite a slow burn that will have some retailers quite nervous. What a lot of retailers will be hoping for is a substantial upturn in trade, really this week. This coming weekend will be crucial for many retailers."

Looking on the bright side, she added: "While people are cutting back on some of their spending, some people still want to celebrate Christmas."

She believed some had the "mentality" of having a "final big spend before they batten down the hatches in the new year".

Weighing the prospects for the economy next year, Moriarty said: "The first two quarters of 2009 for all sectors, retail and non-retail, are going to be tough."

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