Scottish Retail Sales Monitor
Ailing August for Scottish Retail Sales
David Lonsdale, Director, Scottish Retail Consortium:
The total value of Scottish retail sales sagged in real terms in August, declining for a second successive month. Both food and non-food saw a weaker performance, with the hoped for back-to-school bounce failing to materialise and the soggy weather coupled with households’ tighter husbandry of finances impairing sales of clothing and groceries.
Fashion performed poorly, with shoppers shunning summer ranges due to the subpar weather and trading down on back-to-school apparel. Larger household appliances and white goods continued to suffer, as shoppers reined in spending on bigger ticket items. Grocery sales were at their lowest level since July 2022 pegged back in part due to a lack of barbeques. There were pockets of growth. Gaming consoles and smaller electrical items fared well, as did lower value home accessories and textiles. Health and beauty was the stand out performer with skincare, cosmetics and fragrances all improving as a bit more time was spent socialising and in workplaces and as people treated themselves.
Its been a somewhat unnerving start to the second half of the calendar year with retail sales growth yielding to the cost-of-living crunch. Inflation levels are easing however it remains to be seen if elevated mortgage rates and talk of tax rises ultimately leave household incomes and pay packets lighter, impacting sentiment and spending. Policy makers should be wary about adding any further pressure onto household finances over the months ahead.
Paul Martin, Partner, UK Head of Retail, KPMG:
In August, retail sales improved by 5.6% year-on-year in Scotland, a small increase from the previous month but well below the three-month average of 7.5%. High inflation continued to hurt sales, causing a second consecutive monthly drop. The disappointing summer weather and other factors also contributed to slow sales, including weaker than normal back-to-school shopping. Food sales also slowed thanks to the less barbecue-friendly weather which became a mainstay of August.
As we bid farewell to summer, retailers are turning their attention towards the crucial Christmas shopping season. Although inflation has eased, it is at a slower pace than anticipated, so savvy shoppers are expected to commence their Christmas bargain hunting earlier this year. Maintaining consumer confidence as we approach the holiday season is of utmost importance, especially for those retailers who rely on a strong golden quarter to ensure their viability into 2024.