THE value of Scottish retail sales in July was up by 0.7 per cent on a year earlier, industry figures show, but this advance was driven in large part by food price inflation.
The figures, published today by the Scottish Retail Consortium, show non-food sales remained weak last month and thus signal continued consumer caution amid economic and political uncertainty.
Meanwhile, the SRC highlighted mounting concerns over higher inflation, and the impact on households, as it contemplated the outlook.
The value of food sales in Scotland in July was up by 4.2 per cent on the same month of last year. However, the value of non-food sales, the more discretionary element of retail spending, was last month down by two per cent on July 2016. In June, the value of non-food sales had been down by 4.2 per cent on a year earlier.
The overall 0.7 per cent year-on-year growth in the value of Scottish retail sales in July was only half of the corresponding 1.4 per cent increase in the UK as a whole. This continues a pattern in recent years of a weaker retail sales performance in Scotland than in the UK as a whole. The SRC has highlighted the part played by London and south-east England in boosting the overall UK retail sales figures.
However, July was the first month in which the value of Scottish sales has shown year-on-year growth since April, when retailers were boosted by the timing of Easter.
SRC director David Lonsdale said: “Retail sales in Scotland witnessed a welcome resumption to growth last month, turning in a creditable performance driven by grocery sales.”
He added: “Food sales did well, in part because of inflation arising from food commodity prices and the exchange rate. Non-food categories continued to struggle, even accounting for the impact of online sales. The bright spots were good demand for back-to school clothing and footwear and gaming consoles, with store promotions aiding home furnishings.”
Mr Lonsdale flagged the challenges facing retailers.
He said: “Retailers will be questioning whether even this modest level of sales growth might prove fleeting, given mounting concerns about overall inflation and the impact on increasingly cash-strapped consumers.”
Craig Cavin, head of retail in Scotland for accountancy firm KPMG, said: “Growth in food sales appears to be the new norm, albeit heavily driven by inflation. Grocery sales have remained in the black for six straight months now [with year-on-year growth].”
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