Summer sales in doldrums

Shopping baskets

Sales continued to plod along during August despite receiving a slight boost from the Olympics, according to the latest SRC-KPMG Scottish Retail Sales Monitor.

Last month, Scottish sales decreased by 1.9% on a like-for-like basis compared to August 2015, when they had decreased by 2.9%. This is a deeper decline than the three-month average of -1.6% but in line with the 12-month average of -1.9%.

Total Scottish sales decreased by 2.2% compared with August 2015, when they had declined by 2.4%. Adjusted for deflation measured at 2.0% by the BRC-Nielsen Shop Price Index, sales decreased by 0.3% in real terms. On a three-month average basis, Total sales increased 0.1% in real terms.

Food sales were the “star performer” in an otherwise disappointing month, according to David McCorquodale, Head of Retail for KPMG.

“Despite the deflationary environment causing further shrinking, the sector saw its best three-month average growth for more than two years,” he commented. “Staycations, coupled with the Rio Olympics, saw families gathering at home to watch Team GB, helping to drive increased volumes.”

The Rio factor managed to soften the impact of a weakened Non-Food sector. Adjusted for the estimated effect of Online sales, total Non-Food sales decreased by 1.7% versus August 2015.

David Lonsdale, Director of the Scottish Retail Consortium, found the figures “uninspiring“, saying “Over the past three months as a whole the real term growth in retail sales has nudged up a meagre 0.1%”.

Lonsdale said the Scottish Government needed to look closely at the rising tax burden on retailers, repeating his call for a reform of business rates.

With an eye on the forthcoming Scottish Budget, he also warned against raising personal tax rates, saying: “Ministers should be wary about adding to the pressure on household disposable incomes at a time when consumer confidence remains fragile.”

The full report can be downloaded from the British Retail Consortium’s website.