The poor sales growth, revealed today in the Scottish Retail Consortium's (SRC's) latest survey, raises further concerns over the health of the economy north of the Border at a time of broader UK recession.
A spokeswoman for the SRC highlighted the greater proportion of public sector employment in Scotland than in the UK as a whole as a factor in the consistently poorer retail sales figures north of the Border. She also highlighted the relative strength of the south-east of England.
Official data today from the Scottish Government will reveal whether Scotland joined the UK as a whole in entering renewed recession in the first quarter of this year. Scottish gross domestic product fell by 0.1% in the fourth quarter of last year. A further quarterly decline in output north of the Border in the opening three months of 2012 would put the Scottish economy back in recession.
The total value of Scottish retail sales in June was up just 1.2% on the same month last year. This was well adrift of the 3.5% year-on-year pace of increase in UK-wide sales value in June, which was reported by the British Retail Consortium earlier this month.
The outturn for Scottish retail sales last month is particularly disappointing given that it was against a weak comparative. There was no year-on-year growth in retail sales value north of the Border in June 2011.
And, given annual UK consumer prices index inflation was 2.4% in June, the 1.2% year-on-year rise in sales value in Scotland last month implies a fall in volumes.
Non-food sales, the more discretionary element of consumer spending, were again particularly weak in June, showing a 0.5% fall in value compared with the same month of last year. The value of food sales last month was up 3% on June 2011.
SRC economist Richard Lim highlighted the fact that it was the "15th month in a row" that the year-on-year movement in retail sales had been worse in Scotland than in the UK as a whole.
Asked about the reasons for this, the SRC spokeswoman replied: "Inevitably, the impact of the recession resulted in a lot of public sector job losses, and I believe public sector employment does make up a more considerable proportion (of total employment) in Scotland than the rest of the UK. I believe there are employment reasons that have hit hard."
She added: "Generally, the south-east has held up better. It is definitely true as well that northern parts of England have had a very tough time."
The spokeswoman also
highlighted a lack of investment in some town centres even before the 2008/09 recession struck, declaring that recent store closures made these places look more run-down and therefore less likely to attract consumers looking to spend money.
The SRC highlighted the depressing impact of very wet weather in June on sales of clothing.
And Mr Lim noted the food sales boost in Scotland in the run-up to the Queen's Diamond Jubilee celebrations had not been on the same scale as that evident in the UK-wide statistics.
David McCorquodale, head of accountancy firm and SRC survey sponsor KPMG's retail practice in Scotland, said: "Yet again, Scotland's retail performance was weaker than the UK as a whole and this cannot be entirely attributed to the nation's reduced appetite for Jubilee celebrations."
He noted optimism had been "quickly washed away" by heavy rain after a "slight uplift" in summer clothing sales in early June.
Mr McCorquodale added: "A number of factors are combining to make times particularly challenging for retailers, and the vast majority are now resorting to heavy and sustained promotional campaigns, which impact negatively on margins, just to tread water."
