‘Weak’ August for Scotland’s retailers

Food aisle in convenience store

It was a weak August for Scottish stores when measured against last year’s performance, according to figures released in the latest SRC-KPMG Scottish Retail Sales Monitor.

In August 2015, total Scottish sales decreased by 2.4% compared with August last year, when major events, like the finale to the Commonweath Games, helped to drive footfall. This resulted in August having the second best performance of 2014, at -0.3%. Like-for-like sales decreased by 2.9% on last August, when they had decreased by 1.7%. Adjusted for deflation, total Scottish sales decreased by 1.1%.

Total Food sales were 3.0% down on August 2014, when they had decreased 1.8%. This represents an improvement over July. Adjusted for the estimated effect of online sales in Scotland, total Non-Food sales decreased by 0.5% over August 2014, when they had increased by 2.8%, their second fastest growth in 2014, excluding Easter distortions.

Three-month average total Non-Food sales growth was 0.6% (online adjusted) in Scotland against a growth of 3.0% in the UK, the smallest gap displayed year to date.

David Martin, Head of Policy and Social Affairs, Scottish Retail Consortium, said: “Although retailers had a tougher time during August getting consumers to spend, the three-month rolling average for total sales was the best recorded since May and suggests a general improvement across the longer term. Nevertheless, the trading environment remains incredibly challenging for retailers, especially for those selling food.

“Against this difficult backdrop, government-inspired costs continue to rise. This toxic combination has resulted in significant retail casualties with more announced this month. This should give politicians moment to pause and reflect about policies that can aide the retail industry as they turn to developing their manifestos for the 2016 Scottish election.”

David McCorquodale, Head of Retail at KPMG, said the weather couldn’t be blamed for poor sales, as temperatures and sunshine hours were at or above average for the month. He saw a flicker of light though, with Non-Food sales growth showing some positivity over the summer months.

“As consumer confidence in Scotland oscillates between negative and positive, retailers will be very keen to ensure that, before long, the confidence can return sufficiently to release some of the Scottish purse strings. As retailers try to wean the consumer off the discount drug, this can only be achieved if the consumer feels willing to commit.”