Mixed picture for Scotland’s under-pressure retail sector

Food sales pushed ahead last month but the Scottish retail sector as a whole continued to show a mixed outlook.

Latest figures from the Scottish Retail Consortium-KPMG monthly monitor show food sales were 4.1% higher in August than they were a year earlier.

The strong performance boosted average growth in the category to 2.3% over the past 12 months, the highest level since the summer of 2014.

However, by comparison the nonfood sector continued on its downwards trajectory during the month.

Sales were 1.5% lower than in August last year, when they decreased by 3.7%.

On a 12-month horizon non-food sales have fallen by an average of 2.7%.

Overall, retail sales were 1% ahead in Scotland last month and were 1.9% ahead on a like-for-like basis when new store openings and closures are stripped out.

Ewan MacDonald-Russell, head of policy and external affairs at the Scottish Retail Consortium, said “on the surface” there was some good news in the August figures.

“However, it’s important to note both food and non-food are being compared to a very poor August in 2016,” said Mr MacDonald-Russell.

“Therefore, the apparent spike in performance may well be a statistical quirk rather than evidence of sustained sales improvement.

“Nonetheless, retailers will welcome these figures after a pretty disappointing summer.

“However, the underlying challenges facing the industry, not least the continued pressure on household incomes, and fragile consumer confidence, mean Government should be very careful about any policies which could lead to increases to the cost of living.”

Craig Cavin, head of retail in Scotland for KPMG, said grocery sales had “led the charge”.

However, he said there were some positives for non-food with the estimated impact of online sales taking the sector into growth for the month.

“With August bringing children’s return to school, the Edinburgh Festival and the release of autumn clothing ranges, non-food’s recent poor performance received a late summer boost, with online sales nudging the category into growth,” Mr Cavin said.

“However, despite home furnishings, TVs and fridges all selling well as consumers prepare their houses for the longer autumnal evenings, other nonfood remained in decline.”