Press Release
SRC-KPMG Scottish retail sales monitor June 2012: Scottish sales stagnate in June downpours
20 July 2012
Total sales in June were 1.2% up on June 2011, when they had not grown at all. Like-for-like sales did not show any growth on last June, when they had fallen 1.8%.
Food sales rose above their year-earlier level on a like-for-like basis, but once food inflation is taken in to consideration volumes are likely to have fallen. An exceptionally wet June damaged the sales of seasonal products.
Clothing and footwear sales were also tough and suffered from the mild and wet weather. Big-ticket purchases continued to struggle and were often promotion-led, amid continued consumer caution.
Like-for-like and total retail sales were weaker than for the whole UK. This was the fifteenth month in a row that UK sales growth exceeded that in Scotland alone.
Richard Lim, Scottish Retail Consortium Economist, said:
"June's prolonged wet weather has caused Scottish retail to stagnate. Consumers remain cautious about their personal finances and lower temperatures have cooled demand for summer fashions and outdoor leisure goods. With shops full of seasonal stock, retailers are hoping a possible Indian summer delivers some salvation.
"Food and drink retailers are faring the best in a weak market but when inflation is taken into account, volumes of sales are likely to have declined. There was a boost in the run up to the Jubilee celebrations as shoppers bought in party foods for the long weekend but it wasn't on the same scale as seen in our UK-wide statistics.
"This is the fifteenth month in a row that retail sales growth in the UK has outstripped Scotland, although the gap has narrowed. Retailers are discounting aggressively to encourage shoppers through their doors and to maintain the many thousands of jobs which depend upon the sector. Falling inflation offers some hope with signs that the squeeze on real disposable incomes are easing, but a fundamental revival in consumer spending may be some way off yet."
David McCorquodale, Head of Retail in Scotland, KPMG, said:
"On first appraisal, June appears to have been a better month for Scotland's retailers, with total sales increasing slightly by 1.2 per cent on the corresponding period in 2011. However, this statistic does not tell the whole story for retailers as much of that rise comes from increased food sale values which continue to be driven by inflation rather than volumes.
"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, which provided a fillip to retailers in other regions of the UK. A particularly wet June further dampened spirits, as evidenced by the fact we witnessed a slight uplift in sales of summer clothing during a warm period at the beginning of the month. This optimism was quickly washed away as the heavy rains took hold and with the end of summer fast approaching retailers will certainly be hoping for improved weather in the coming weeks. 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."
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