SRC: Inflation bites as Scottish retail sales barely budge in May
![SRC: Inflation bites as Scottish retail sales barely budge in May](https://www.scottishfinancialnews.com/uploads/Glasgow%20unsplash%20Buchanan%20Street%20unsplash%20Princes%20Square%20Shopping%20Centre%20unsplash.jpeg)
May brought lacklustre results for Scottish retailers, with total sales increasing a mere 0.1% compared to the previous year.
Adjusted for inflation, sales actually dipped 0.5%. While food sales grew by 1.1%, non-food sales dropped by 0.8%.
Despite the subdued figures, retailers remain optimistic about the summer months, citing upcoming events like the Olympics and the Euros as potential drivers of consumer spending. Technology and beauty sales performed well in May, offering a glimmer of hope.
Ewan MacDonald Russell, deputy head of the Scottish Retail Consortium, said: “The slight fall is likely a consequence of comparison with a strong 2023 performance, where the King’s coronation and two bank holidays encouraged shoppers to splash out, compared to this year where the splashing was more to do with the miserable weather.
“Food and drink sales continue to grow, albeit in a more modest manner now food price inflation has stabilised. Technology sales did well, boosted by a combination of new products alongside many early pandemic purchases now requiring replacement.
“Beauty and casual clothing ranges performed reasonably, albeit with little sign shoppers were buying more formalwear.”
He continued: “Looking ahead retailers will hope the upcoming run of major events, including the Olympics, European Men’s Football Championships, and a series of high-profile concerts, will kick off a brighter period of trading.
“Retailers know all too well how cruel summer can be so will hope they can shake it off and be ready for it to be a potential gold rush to get out of the woods in the coming months.”
Linda Ellett, UK head of consumer, retail and leisure at KPMG, said: “With the early bank holiday and some better weather, there was a big step up in the number of categories that saw positive high street sales growth which was close to 3-in-4.
“Health, personal care, beauty, and computing continued to sell well, whilst women’s and children’s clothing also saw small increases in sales. After nearly three years, things may have turned a corner for online retailers, with year-on-year sales growth across most categories, including toys and baby equipment and house textiles.”
Ms Ellett added: “Whilst sales growth was minimal, it could point to some signs of recovery for the sector, and retailers will be eager for that trend to continue as they carefully maintain their pricing, stock and cost base.
“Over the coming weeks retailers will be hoping that warmer weather, purchases related to summer holiday demand and Euro 2024 provide a stimulus to get consumers buying again.”
She concluded: “The economy may be improving, but the health of the sector remains fragile, with major investment held back by many until there are clear signs that consumer confidence has turned into spending.
“With the General Election date fixed, retailers will be keen to hear positive measures to help boost the economy and, in particular, signs that long awaited changes to the business rates regime are finally on their way.”