SRC-KPMG SCOTTISH RETAIL SALES MONITOR JULY 2014: Total Scottish sales decreased by 1.8% vs. July 2013

LONDON, 2014-8-22 — /EPR Retail News/ — In July 2014 total Scottish sales decreased by 1.8% compared with July 2013, when they had increased by 4.0%, the strongest growth recorded in 2013. Like-for-like sales decreased by 3.7% on last July, when they had increased by 1.4%. Adjusted for deflation measured by the BRC-Nielsen Shop Price Index, Total Scottish sales increased by 0.1% in July.

Total Food sales were 2.8% down on July 2013, when they had increased 5.6%, the strongest Food growth recorded in 2013. This is the deepest decline since March. Over the last three months, total Food sales declined by 2.0%, compared to 0.1% growth over the last twelve months.

Total Non-Food sales decreased by 1.0% on a year earlier when they had increased 2.6%. Adjusted for the estimated effect of online sales in Scotland, total Non-Food sales would have increased by 0.7%, the strongest growth in the last three months.

The gap between the three-month average growth in the UK and Scotland has narrowed, both for Food and online adjusted Non-Food.

David Lonsdale, Director of the Scottish Retail Consortium, said: “Despite a healthy rise in footfall witnessed on Scotland’s high streets and shopping centres in July, it didn’t translate into a commensurate increase in the actual value of retail sales. The total value of sales grew by a meagre 0.1 per cent in real terms, once shop price deflation is taken into account. The bright spot once again was sales of non-food items which, adjusted for the contribution of online retailing, rose by 0.7 per cent, its strongest growth over the past three months. This was driven by strong trade in outdoor furniture, DIY and home furnishings, as well as Commonwealth Games-related purchases.

“Further discounting across the grocery sector led to a fall in the total value of food sales, however comparisons with last year ought to be tempered as July 2013 was a high water mark for food related sales. A number of high profile sporting successes in the same period last year led to bumper demand for celebratory food and drink. “Going forward, retailers will be buoyed by further recent rises in employment and falling unemployment in Scotland, albeit forecasts for future wage growth over the short term remain tentative at best. Government can assist with policies which put money into people’s pockets, keep down the cost of doing business, and make it easier for retailers to invest and expand their premises.”

David McCorquodale, Head of Retail at KPMG, said: “Against a very tough set of comparables last year, when we were basking in a heatwave and a Scottish Wimbledon champion, the July sales numbers in Scotland are not as bad as the headlines perhaps suggest. Clothing and footwear have enjoyed a better spring and early summer this year and so it is not surprising they have cooled off relatively in the last couple of months against strong figures last year. The decline in other non-food is not as sharp as it was earlier in the year as homeowners feel a little more confident to spend on furniture, albeit the confidence is cautious. Scotland’s high streets saw improved footfall in July, no doubt boosted by Glasgow’s Commonwealth Games. However, as with the Olympics two years ago, these events may boost the restaurant trade but don’t always boost high street sales.

“The food and drink sector continues to be the drag on the statistics with competitive pricing amongst the grocers driving negative like-for-likes for the twelfth month in a row. The decline in Scottish food sales is similar to that felt in the rest of the UK and so we are not noticing regional variations on this theme.”

British Retail Consortium, 21 Dartmouth Street, Westminster, London, SW1H 9BP. 020 7854 8900. info@brc.org.uk.