Scottish retail struggles to recover as sales stall in August

Scottish retail is showing no return to growth as recovery stalls and sales continue to show a similar level of decline as that seen in July, according to latest figures.

A report by the Scottish Retail Consortium (SRC) and KPMG LLP has shown that total sales in August this year decreased by 7.5 per cent compared with August 2019 when they had decreased by 0.5 per cent.

In August, Scottish retail sales decreased by 8.9 per cent on a like-for-like bases compared with August 2019, when they had decreased by one per cent.

Total food sales increased by 1.5 per cent this year, compared with 2.7 per cent last year. This is the lowest increase since June 2019 and well below the 3 month average growth of 3.1 per cent and the 12 month average of 3.2 per cent.

Paul Martin, head of retail at KPMG UK, said: “August’s figures reinforce the overwhelming challenges facing Scotland’s High Streets. With total year-on-year sales down 7.5%, the situation is improving, but incredibly modestly. An ongoing lack of consumer confidence, combined with local lockdowns, and a massive decline in summer tourism numbers have in summary created arguably the most difficult period Scotland’s retail sector has witnessed in modern times.

“All eyes will now be on the Autumn period. As coronavirus cases rise and the furloughing of staff eases off, there are real fears the industry could face even greater challenges ahead. The focus now will be on restoring confidence, working collaboratively as a sector to drive up footfall, and reducing costs as much as possible, in the hope that we’ll see a more rapid return to growth towards the end of the year.”

David Lonsdale, director at the SRC, commented: “Six months on from the start of the pandemic and the revival of retail is proving painfully slow and protracted. The recovery in stores witnessed over recent months petered out in August, with Scottish retail sales now having fallen for six months in a row compared to the same period last year. Any hopes of a return to growth, or even better a modest claw back of lost sales from the earlier part of the pandemic, will have been thwarted by this latest data.

“Not all parts of the industry have been impacted equally. Non-food categories continued to recover, buoyed by online purchases and sales of larger household goods such as sofas, beds, white goods and TVs. More modestly priced homeware items did well too. Computing continued its strong run driven by the return of students and remote working. Grocery sales nudged up but recorded its weakest performance in over a year, as eating out resumed.

“Clothing and footwear underperformed yet again, even accounting for back to school items, as did beauty and cosmetics. That said, gifting items lifted during the month, an indication of early festive purchasing.

“The past six months have been bruising for the industry, and even with the crucial Christmas trading period coming in to view the near term outlook remains uncertain. Much of the industry continues to suffer from a protracted weakness in demand, particularly those more reliant on the hustle and bustle of high footfall locations in our city centres and shopping malls.”

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