YEAR-on-year growth in Scottish retail sales slowed sharply further in August, as the non-food category remained weak and the stronger grocery sector lost momentum, industry figures reveal.
The Scottish Retail Consortium’s latest monthly monitor, published today, shows the value of sales in August was up just 0.5 per cent on the same month of 2017.
Year-on-year growth in Scottish retail sales had been 1.1% in July. And, in June, the value of Scottish retail sales had been up by 2.7% on a year earlier.
The value of non-food sales, the more discretionary element of consumer spending, was in August down by 2.2% on the same month of last year.
Food sales value last month was up by 3.8% on August 2017. In July, the value of food sales had been up by 5.6% on the same month of 2017.
Year-on-year growth in retail sales value in the UK as a whole has also slowed sharply. Figures published last week by the British Retail Consortium showed year-on-year growth in UK sales value had slowed to 1.3% in August from 1.6% in July, having been 2.3% in June and 4.1% in May.
Commenting on the breakdown of non-food sales in Scotland in August, the SRC said consumers had been “more inclined to improve their homewares and furniture as opposed to updating their wardrobes for the darker months ahead”.
Ewan MacDonald-Russell, head of policy and external affairs at the SRC, noted the value of Scottish retail sales had shown year-on-year growth for four consecutive months. Retail sales value in April had been down by 3.4% on a year earlier, although this partly reflected Easter having fallen earlier this year than in 2017.
Mr MacDonald-Russell said: “A fourth month of sales growth brings a positive end to a successful summer for Scottish retailers.
“Yet, as the shadows lengthen with the nights drawing in, there will be some concern the same challenges we saw earlier in the year may return with strong grocery sales offsetting a fall in non-food sales.”
He highlighted the fact that the grocery sector remained relatively strong.
Mr MacDonald-Russell said: “Food sales were up by 3.8 per cent, stronger than the rest of the UK, but not as strong as the record [growth] hit in July.”
He noted sales of electrical goods had been slightly lower than normal, declaring that this reflected the fact “many consumers bought new devices earlier this year for the World Cup and other big sporting events”.
Mr MacDonald-Russell added: “There is still no sign consumers are refreshing their autumn wardrobes…All the indicators are consumers are still prepared to spend, but they have a limited amount of discretionary spending, and are carefully choosing each month what the priority is.”
Paul Martin, UK head of retail at accountancy firm and survey sponsor KPMG, said: “August can be a tricky month for retailers as summer sales draw to a close and shoppers wait for cooler temperatures to hit before investing in a winter wardrobe.”
He added: “Even with the impact of inflation, food sales increased at a slower rate than in July. Nevertheless, grocery bills continue to rise for many shoppers.
“On the non-food side, the return to school boosted sales of children’s clothes, while computer sales also spiked in August as consumers prepared for the start of university term times.”
Mr Martin declared the Edinburgh Festival Fringe and European Championships in Glasgow “may have drawn in tourism throughout August”.
However, he added: “This didn’t counteract the squeeze on consumer spending. While any growth [in sales] is positive, retailers must continue to pursue repositioning, restructuring and transformation programmes to stay afloat.”
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