Retail sales ‘shrivelled’ last month in ‘somewhat bruising figures’

Retail sales in Scotland dropped last month in what have been described as “somewhat bruising figures”.

Scottish sales for May 2019 decreased 3.4% on the same month last year when they had increased by 1.8%, according to the monthly SRC-KPMG monitor.

Total sales decreased by 3.1%, compared with a 2.6% increase in May 2018, with total food sales increasing by 0.5% after a 4.2% rise last year.

However there was also a 6.1% drop in non-food sales, with clothing and footwear recording “its steepest ever monthly decline”.

David Lonsdale, Scottish Retail Consortium (SRC) director, said: “These are somewhat bruising figures, with retail sales having shrivelled last month by almost 4% once shop price inflation is taken into account.

“Shoppers clearly kept a firm grip on purse strings and wallets, unsurprising against a backdrop of rising household costs and political and economic uncertainty.

“Grocery sales ran out of puff, recording their weakest performance in two and a half years and well below the three and 12-month averages.

“At the more discretionary end of retail spending, non-food purchases fared poorly, especially clothing and footwear, which recorded its steepest ever monthly decline. Larger and outdoor items such as garden furniture also struggled.

“Fewer high profile sporting events this year compared to last contributed to a challenging picture, with sales of mobile phones and cough and cold remedies amongst the few bright spots.

“Retailers are striving to reinvent themselves and respond positively to shifting shopping habits, however that is all the more challenging against a backdrop in which customer demand is weak and a seemingly relentless rise in tax and regulatory burdens.”

With an adjustment for the estimated online sales effect, total non-food sales were down by 5.6% – the worst decline since recording such a figure began in January 1999.

Paul Martin, UK head of retail at KPMG, said the figures “confirm the scale of the challenges facing retailers throughout Scotland”.

He added: “While the industry continues to outperform the rest of the UK, there is a clear downward trend across most major categories, including static growth in typically resilient food sales, and the worst performance for non-food retailers since our records began in January 1999.

“Ongoing economic and political uncertainty, combined with shifting consumer behaviour, are creating a volatile landscape for Scotland’s retail sector, with leading brands facing a struggle for survival.

“Our insight suggests it could be some time before we see signs of recovery.”

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