Scottish retail sales improve

David Lonsdale, director of Scottish Retail Consortium

Scottish retail sales improve

In July Scottish sales increased by 1.3% on a like-for-like basis compared to the same period in 2016, when they had decreased by 1.7%.

Total sales in Scotland rose by 0.7% in July, compared with July 2016. This indicates a stronger performance than the twelve-month average at -0.7%.

Food sales in July increased 4.2% in total, while total non-food sales declined 2% compared to July 2016, when they had decreased by 1.9%.

David Lonsdale, director of Scottish Retail Consortium said: “Retail sales in Scotland witnessed a welcome resumption to growth last month, turning in a creditable performance driven by grocery sales and a better showing from non-food categories. Adjusted for shop price inflation, which has continued to fall, this was the best performance for three months and the second strongest this year.

“Food sales did well, in part because of inflation arising from food commodity prices and the exchange rate. Those sales are still ahead of the monthly average for 2017, but have fallen back since the heady figures seen earlier this Spring. Non-food categories continued to struggle, even accounting for the impact of online sales. The bright spots were good demand for ‘back-to school’ clothing and footwear and gaming consoles, with store promotions aiding home furnishings.”

“Looking forward retailers will be questioning whether even this modest level of sales growth might prove fleeting, given mounting concerns about overall inflation and the impact on increasingly cash-strapped consumers. MSPs now exert significant influence over disposable incomes and it is imperative upcoming decisions on personal taxation and in turn the amount of money in people’s pockets are ones which support consumer spending and the economy.”

Craig Cavin, Head of Retail in Scotland, KPMG said:  “As is becoming a common theme, food sales contributed most to the overall growth of Scottish retail sales in July, whilst non-food sales once again contracted. However, there were signs that the tide was beginning to turn for non-food sales – no doubt bringing with it a much-needed sense of optimism for the industry.”

“Looking to standout categories in the month; strong footwear sales were encouraged by shoppers preparing for holidays, if not the upcoming return to school. Home accessories and furniture sales also grew, but retailers will be particularly keen to see continued growth of big ticket items, as these can be a key indicator of consumer confidence.”

“Growth in food sales appears to be the new norm, albeit heavily driven by inflation. In fact, grocery sales have remained in the black for six straight months now. The hope now is that non-food sales can have its own resurgence.”