• Text size      
  • Send this article to a friend
  • Print this article

Retail sales down for month compared to the rest of UK

THE value of Scottish retail sales in June was down 1.1 per cent on the same month of 2013, in contrast to a year-on-year rise in the UK as a whole, industry figures have revealed.

SUBDUED: Latest retail figures for the second quarter published by the Scottish Retail Consortium make disappointing reading.
SUBDUED: Latest retail figures for the second quarter published by the Scottish Retail Consortium make disappointing reading.

The figures, published today by the Scottish Retail Consortium, show a year on-year fall of 1.4 per cent in the value of food sales north of the Border last month, amid the ongoing price war in the grocery sector.

They also show that the furniture and flooring, home accessories, house textiles, outdoor living, and do-it-yourself categories had a subdued month in June, with the continuing absence of pay growth in inflation-adjusted terms cited as a possible factor.

But the clothing and footwear category achieved a year-on-year rise in sales value for a second consecutive month in June.

Figures published earlier this month by the British Retail Consortium showed the value of sales in the UK as a whole last month was up 0.6 per cent on June 2013. This marked a further sharp slowdown in year-on-year growth in UK retail sales value, which had come in at two per cent in May and 5.7 per cent in April.

The latest SRC figures continue the pattern of the year-on-year movement in retail sales value in Scotland being weaker than that in the UK as a whole.

However, citing the BRC's annual shop price deflation rate of 1.8 per cent for June, the SRC noted that this implied the volume of retail sales in Scotland in June was up 0.7 per cent on the same month of last year. It noted that, excluding January and Easter, this was the strongest year-on-year growth in Scottish sales in real terms in 2014.

And the SRC highlighted its belief that the year-on-year movement in non-food sales north of the Border would have been less weak in June if online channels had been taken into account.

Its figures show non-food sales in June were down 0.8 per cent on the same month of 2013. However, the SRC estimates that they would have shown a year-on-year increase of 0.5 per cent if online sales had been taken into account.

Commenting on the latest figures, Edinburgh-based David McCorquodale, head of accountancy firm and SRC survey sponsor KPMG's UK retail sector practice, said: "What the consumer is saving in the battle of the grocers is not necessarily being recycled into the non-food categories. The decline in food sales in Scotland is similar to that in the rest of the UK and is more reflective of price reductions from the grocers as they battle for share of wallet than significant volume shifts."

He added: "In non-food, it is encouraging to see the fashion and footwear category performing well and with less discounting than recent years. However, the uplift in household and furniture sales seen earlier in the year has regressed with confidence levels receding again, perhaps caused by wage rate inflation not rising in real terms as hoped or through fears around a rise in interest rates."

UK base rates have been at a record low of 0.5 per cent since March 2009, but economists expect the first rise this cycle to come later this year or in early 2015.

Assessing the outlook, Mr McCorquodale said: "A few key months lie ahead to inject confidence in the economic recovery and translate that through the tills."

David Martin, head of policy and external affairs at the SRC, noted that the year-on-year fall in the value of Scottish retail sales in June was not as sharp as the corresponding 1.6 per cent drop in May.

But he said: "Despite June's retail figures showing a slight improvement on the previous month, they rounded off a disappointingly weak second quarter.

"Warmer weather at the start of the month helped to get shoppers out, but, as the weather cooled down, so did sales."

Mr Martin highlighted tough competition in the grocery sector.

He said: "It is clear that cash-conscious consumers have grown comfortable with value, especially on food, and continue to benefit from competitive pricing driven by stiff competition between the major grocery retailers."

Mr Martin was upbeat about consumer confidence and encouraged by the strength of clothing and footwear sales.

He said: "Despite a slight set back in consumer confidence in June, overall consumer confidence has rebounded significantly throughout 2014. Fashion continues to benefit from this confidence."

Comparing the three months to June with the second quarter of 2013, the value of retail sales in Scotland was down 0.3 per cent, in contrast to a 2.6 per cent year-on-year rise in UK as a whole.

Contextual targeting label: 
retail

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis.
If you're a relatively new user then your comments will be reviewed before publication and if we know you well and trust you then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

249617