Accelerating food growth see Scottish shops enjoy 0.8 per cent rise in retail sales – KPMG

Excluding the distorted rate from April, this is the highest growth since December.

On a three-month basis, like-for-like sales grew by 0.8 per cent, the fastest rate of 2017 so far.

Last month saw total sales in Scotland fall by 0.2 per cent compared with May 2016, when they had declined by 0.3 per cent.

This figure is the closest to the UK equivalent since August 2013.

This result keeps the twelve-month average at -1.0 per cent and pulls the three-month average to -0.1 per cent, the highest since March 2014. Adjusted for deflation measured at 0.4 per cent by the BRC-Nielsen Shop Price Index (SPI), May sales grew by 0.2 per cent.

Total Food sales grew by 4.5 per cent versus May 2016, when they had decreased by 0.7 per cent. Excluding last month’s distorted rate, this is the fastest food growth since July 2013, and pulls the three-month and twelve-month averages to 4.1 per cent and 1.1 per cent respectively. This is the fastest three-month average since August 2013.

Total Non-Food sales declined 3.8 per cent compared to May 2016, when they had decreased by 0.1 per cent. This is below both the three-month average of -3.4 per cent and the twelve-month average of -2.7 per cent.

Adjusted for the estimated effect of Online sales, Total Non-Food sales fell by 2.9 per cent versus May 2016, when they had increased by 2.6 per cent. On a three-month basis, the Online-adjusted Total Non-Food change was -2.1 per cent. This remains below the UK average of 0.1 per cent, but the gap is narrowing.

David Lonsdale, Director of the Scottish Retail Consortium, said: “Retail sales in Scotland nudged up a touch last month, once falling prices at shop tills were factored in. Unsurprisingly, there was a marked deceleration from the octane-fuelled performance witnessed during April; which was driven by Easter sales. Whether this owes more to shoppers catching their breath, or reflects a more prolonged period of cooler retail sales amid growing uncertainty over the outlook for household disposable incomes, remains to be seen.

“Grocery sales did well again, with the category recording its fastest growth in almost four years. However, that growth is partly being driven by rising food price inflation, so grocers will see only modest benefit. Non-food retail sales remained in the doldrums. There was a greater focus across most non-food categories on value and affordability, with a corresponding dip in sales of larger or bespoke household items. Sales of mobile phones did well as did summer-related women’s footwear and sandals.

“For Scotland’s retailers, all eyes over the coming months will be on the direction of consumer spending, with family finances set to be buffeted further by overall inflation outstripping the growth in wages, and as recent domestic cost increases such as council tax take hold.”

Craig Cavin, head of retail in Scotland at KPMG, added: “Food sales continued to be the main driver of sales in May, as the gap in performance between food and non-food persisted. For the fourth consecutive month total food sales were in the black whilst non-food figures languished in the red. May’s figures pulled food sales up to a three-month average of 4.1%, the highest since August 2013.

“Continued inflationary pressures and stagnant wages point towards consumers channelling their spending towards food and drink essentials, and sticking to the basics for the likes of clothing and health and beauty items.

“Non-food sales slumped once again and brought the 12-month average equal to the lows noted in March – the lowest figure recorded since December 2012. Non-food retailers, particularly fashion outlets, will be glued to the weather forecast as we get into the warmer months and shoppers turn their attention to shorts and sandals. Last year’s Euro Championships boosted summer TV sales, but the lack of a big-ticket football event means non-food retailers will look to annual attractions like Wimbledon to bolster sales.”