Scotland outperforms rest of UK
Like-for-like retail sales in Scotland rose 4 per cent during January, compared to a fall of 0.6 per cent in 2006, according to the Scottish Retail Consortium (SRC).

Scotland's performance remained stronger than that across the UK, which experienced like-for-like growth of 3.1 per cent in the same period.

January like-for-like sales in Scotland were the best since last August and significantly above the 3.1 per cent average for the fourth quarter of 2006.

Sales of food and drink had their strongest growth for two years. Clothing, footwear and home and leisure also improved, but the gains were often driven by heavy discounting in the clearance Sales.

SRC director Fiona Moriarty said: 'January saw good sales growth in Scotland, but it came at the expense of margins with much of it driven by big discounting and clearance sales. Food sales were again up in line with UK-wide trends on the back of rising commodity prices and fresh produce promotions.'

However, Moriarty said that achieving similar growth over the next few months will be tough because March and April last year were relatively good months and will be harder to beat. She added: 'The full impact of recent interest rate hikes has yet to filter through and may give consumer confidence a knock.'

Royal Bank of Scotland chief economist Andrew McLaughlin said: 'Retailers made a solid start to the year. This will have come as a welcome relief to retailers that suffered a New Year hangover last year following decent growth in December 2005.'