Holiday spending boosts Scottish retail sales, but consumers face a ‘multitude of headwinds’

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Publishing its latest sales monitor, the Scottish Retail Consortium (SRC) said total sales north of the border rose 4.4% in June, compared to the same month last year. This figure was below both the three-month and 12-month averages, while adjusted for inflation the year-on-year increase was just 1.2%.

Nevertheless, the SRC welcomed “the sharper set of business figures”, noting that they came in a month marked by Jubilee celebrations at the start and by “even more disruption at the end”. on the railways” and with customer footfall continuing to slow.

David Lonsdale, Director of SRC, said: “Even after adjusting for the current higher level of retail price inflation, Scottish retailers delivered a positive performance in June.

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“This was driven by the return of social and special occasions such as weddings and graduations, sales of formal wear and well-dressed dresses. Likewise, retailers profited from spending on sandals, swimwear and sunscreen as Scots geared up for their summer holidays.

“That said, there was further evidence of buyer caution as sales of larger items such as furniture and electronics and electrical items were sluggish, despite further signs of improved inventory availability. on store shelves.”

He added: “Although these more heartbreaking results are pleasing, the fact is that a swallow does not make a summer. It will be a real challenge to sustain this improvement over the coming months as retailers and consumers face a host of headwinds. »

The report showed total food sales rose 2.7% from June 2021, ahead of the three-month and 12-month average growth rates.

Shoppers out and about in central Glasgow. Photo: Jane Barlow/PA

Total non-food sales were up 5.8% year-on-year, although adjusted for the estimated effect of online sales, they were up 1.4% from June 2021.

Paul Martin, partner and head of UK retail at KPMG, which helps produce the monthly sales monitor, said: “June brought some welcome rays of sunshine for Scottish retailers as annual sales growth improved from June 2021. While last month’s numbers provide some cause for celebration, ultimately the impact of inflation means any growth is paltry and does not signify a real shift in gears for the Scottish economy.

“As the cost of living crisis continues to deepen, retailers face a fine line between protecting margins and declining consumer confidence by passing on price increases while negotiating with their suppliers to share cost increases.”

He added: “With warmer summer weather forecast and many consumers opting to holiday at home this year, retailers are hoping the feel-good factor will start to boost some shoppers’ confidence – as levels of overall confidence is currently lower than sales may suggest.”

Inflation currently sits at an annual rate of 9.1%, but is expected to peak at around 11% as higher energy bills trickle down.

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