Scottish grocers suffer July slump

The Scottish Retail Consortium and accountants KPMG have reported that total food sales were down 4.5 per cent year-on-year during July.

The latest Scottish Retail Sales Monitor produced by the SRC and KPMG showed total sales fell by 2.1 per cent last month, and by 2.7 per cent on a like-for-like basis.

David Lonsdale,Director of the Scottish Retail Consortium, said: “This is a somewhat insipid set of figures with retail sales in Scotland in July notching down 0.4 per cent compared to the same period last year, once falling shop price inflation is taken into account. There was a further and stark polarisation in the sales performance of non-food and grocery items, with sales of the former rising at their fastest rate since October. In contrast, grocery sales recorded their poorest results since the monitor started 16 years ago.

“Accounting for a strong contribution from online sales, clothing and footwear did well with customers responding to end-of-season promotions. Categories related to homes such as furniture and flooring saw modest growth thanks again to online sales.

“However grocery sales fared especially poorly in July, with the pace of decline accelerating and at a decidedly faster rate that the three-month average. The continuing lean period for grocery retailers won’t have been helped by a dearth of sporting successes this summer which often help drive celebratory purchases of food and drink, or the lack of sales of barbeque-related fayre. This demonstrates the need for government to support the retail industry, which accounts for over 250,000 jobs in Scotland, and to resist any further increases in the tax or regulatory burden it faces.”

David McCorquodale, Head of Retail at KPMG, added: “The tale of two markets continued in July with food and non-food pulling in different directions. Fashion and footwear led the charge of positivity in the non-food segment with online channels providing the perfect relief from the rain and helping non-food sales record their best month since October last year. Not all sales were driven by discounts and the new season fared well. Spending on home categories also improved with a healthier housing market.

“Food sales plummeted to their worst performance since records began in 1999 as deflation, weather and price promotions proved to be a nasty brew for the grocer and a tonic for the consumer.

“The gulf between Scottish and UK sales performance has widened again and retailers, as they prepare for the important months ahead, will be determined to get local merchandising decisions right.”