Retail sales in Scotland fell by 0.7 per cent in July compared to the same month last year as cash-conscious shoppers reduced spend, it has been announced today.
According to the Scottish Retail Consortium (SRC), like-for-like sales decreased by 2.2 per cent, remaining below the whole of the rest of the UK despite hopes that the Olympics would help drive customers to spend.
“July was not a good month,” said SRC Economist Richard Lim.
“There’s no sign of any pre-Olympic boost for Scottish retail in these figures and cutting back is becoming more widespread. Apart from one Easter-distorted month, food sales performance was the worst since the SRSM began in 1999.
“Even if people bought party food ahead of the Games, they put fewer other things in their trolleys, leaving food spending virtually the same in cash terms as a year ago.”
Despite rising by 4.1 per cent in July 2011, total food sales remained virtually flat last month as a result of food inflation and high promotions, which the SRC believes suggests that the average food basket is shrinking.
Similarly, food sales are currently lower than inflation representing a real-terms fall as consumers avoid unnecessary spend.
Clothing & footwear performed well as purchasing patterns were affected by the exceptionally wet weather though overall non-food sales dropped by 1.5 per cent on the same period last year.
David McCorquodale, Head of Retail in Scotland, KPMG, explained that the gloomy economic climate is dragging the public mood down further.
“The lack of any feel-good factor encouraging consumers into the shops has provided a set of figures much more indicative of the true underlying trend,” he explained.
“These show weakness in sentiment as disposable incomes remain squeezed, despite the fall in headline inflation. It’s a real challenge for retailers to grow sales and many are only achieving this at the expense of margins.”