Zero Growth for Scottish Retail Sales in June

A Scottish Retail Consortium (SRC) survey has suggested that there was no change in the value of retail sales in Scotland in June, compared with a year ago.

According to the SRC-KPMG Scottish Retail Sales Monitor for June 2011, there was zero growth for the month which was a slight improvement on the fall of 1.1% in May.

Like-for-like sales in June were 1.8% lower than a year ago, when they had fallen 1.1%. Total sales showed no change on June 2010, when they had increased 1.7%.

On a like-for-like basis, food sales showed a similar year-on-year decline to May's fall. Non-food sales improved slightly, thanks to an earlier start to many clearance events, but remained well down on a year ago. Consumer caution continued to hit big-ticket housing-related purchases.

As in the UK, both like-for-like and total sales were less bad in June but underlying trends were little changed. Consumer confidence fell much more sharply in Scotland than in the UK as a whole and remained much weaker.

Richard Dodd, Scottish Retail Consortium head of media, said: "When zero sales growth is an improvement you know times are tough. In fact, overall sales were not even that good when the effect on spending figures of inflation and higher VAT is factored in.

"Food sales growth slipped slightly on May. The slight revival overall was driven by non-food sales, helped by price cuts and earlier clearance events but sales were again down on a year ago, just not as badly as the previous month.

"A range of rising costs and low wage growth are combining to hit household budgets and undermine customers' willingness and ability to spend, particularly on non-essentials.

"Scotland's results were also weaker than for the UK as whole. Consumer confidence is lower and falling faster as cuts concerns catch up with Scottish customers and sunny weather was rare."

David McCorquodale, head of retail in Scotland, KPMG, said: "The figures for June are deeply disappointing and it may be that we are starting to see an indication of a longer-term trend.

"In May, total sales fell by 1.1 per cent, the largest drop since records began, while last month saw flat sales year-on-year which obviously is not good news for retailers.

"Across both retail sectors sales were down on the same period last year with shoppers looking to take advantage of discounts and clearance items. Like-for-like non-food sales suffered the worst, down 2.2 per cent on the previous year.

"Uncertainty about jobs and incomes has meant that big-ticket purchases have been put on hold.

"Like-for-like food sales, meanwhile, fell by 1.4 per cent. Poor summer weather has meant annual favourites such as salads, fresh fruit and barbecue products have often been left on the shelves although comfort food and value ranges have fared better.

"This is just the latest set of unseasonable results for retailers and, as the economy finds its feet, it is difficult to be able to predict exactly when the tide will turn for retailers who continue to struggle to attract shoppers back through the doors."

More retail news from Scotland.