Dull June for Scottish retail sales

On a six-month basis, like-for-like sales fell by 0.2 per cent, the first negative rate since November, according to the latest data from the Scottish Retail Consortium.

Last month total sales in Scotland fell by 0.5 per cent compared with June 2016, when they had declined by 1.4 per cent. This is a better performance than the twelve-month average at -0.9 per cent.

Adjusted for deflation measured at 0.3 per cent by the BRC-Nielsen Shop Price Index (SPI), June sales still fell by 0.1 per cent.

Total food sales grew by 4.2 per cent versus June 2016, when they had increased by 0.1 per cent. This pulls the twelve-month averages to 1.5 per cent, the fastest since April 2014.

Total non-food sales declined 4.2 per cent compared to June 2016, when they had decreased by 2.6 per cent. This is below the twelve-month average decline of 2.8 per cent.

Adjusted for the estimated effect of online sales, total non-food sales fell by 1.7 per cent versus June 2016, when they had decreased by 0.5 per cent. On a three-month basis, the online-adjusted total non-food change was -1.2 per cent, below the UK average of +1.2 per cent.

Ewan MacDonald-Russell, Head of Policy & External Affairs at the Scottish Retail Consortium, said: “A disappointing June for retailers as nervous customers continue to postpone discretionary spending due to squeezed household incomes and worries about the economy. In real terms sales fell by 0.1 per cent, with non-food sales in store down by 4.2 per cent. Even when the positive impact of online sales are included, non-food sales were down -1.2 per cent across the last three months.

“Grocery sales were up 4.2 per cent this month and over 12 months recorded their fastest growth since April 2014. However, it’s clear that growth derives from cost pressures from imported goods; resulting from the fall in the value of sterling.

“Our concern is inflation on essential goods is now forcing cash-strapped consumers to put off discretionary spending which exacerbates the pressure on shops. With a quarter of a million Scottish retail jobs it’s crucial the Scottish Government carefully considers the impact on spending and the health of the retail industry when they consider income tax rates later this year.”

Craig Cavin, Head of Retail in Scotland of KPMG, added: “Scottish retail’s struggle continued in June, and the figures paint a familiar picture - strong food sales negated by poor non-food performance.

“The drop in non-food sales, down 4.2 per cent compared to last year, is becoming something of a bleak trend, whilst poor sales in summer ranges and the late arrival of some discounts put a dent in clothing figures. Elsewhere in non-food, the dreich weather impacted on sales of outdoor furniture.

“We should know not to rely on summer sunshine in Scotland or risk disappointment, but a gloomy month has taken its toll nonetheless. The effect of Scotland’s wettest June in over a century was felt across the industry.

“Phones, tablets, games, and health and beauty products were a ray of sunshine through the clouds, but retailers will look for non-food performance to pick up if the sector is to make gains.”