KPMG & SRC: June retail sales on a slow path to recovery

Despite a total year-on-year decline in retail sales of 18.6% in June, Scotland’s retail sector appears to be on a slow path to recovery, according to the latest KPMG and Scottish Retail Consortium (SRC) Scottish Retail Sales monitor. 

KPMG & SRC: June retail sales on a slow path to recovery

The 18.6% decline was above the 3m average decline of 28.0% and below the 12m average decline of 8.3%. Scottish sales decreased by 14.3% on a like-for-like basis compared with June 2019, when they had decreased by 2.8%. This is above the 3-month average decrease of 21.3% but below the 12-month average decrease of 7.4%.

The monitor has also revealed that once online sales are taken into account, the Total decline was just in single digit and much improved from May.

At 4.0%, food remained stronger than the long-term trend, but online-adjusted non-food remained in double-digit decline at 19.4% despite a marked improvement over the 33.0% decline recorded in May.

Paul Martin, head of retail at KPMG UK, said: “With total sales decreasing by more than 14% on a like-for-like basis, compared with June 2019, it’s clear the easing of lockdown has failed to kickstart a full recovery in Scotland’s retail sector. Despite a positive 4% growth in total food sales, and categories including technology and sports equipment witnessing increasing demand, the overall outlook remains incredibly depressed, particularly for clothing retailers.

“The shift to online sales has helped offset some of the challenges, but the situation remains critical for many of the country’s highest profile brands as well as independent retailers. As we slowly enter the final phase in Scotland’s lockdown, we’re confident that conditions will continue to improve, but a concerted, collaborative effort from the industry and political leaders, will be essential if we’re to reverse the long-term downward trend and return to sustainable growth in the country’s High Streets.”

David Lonsdale, director at the Scottish Retail Consortium, added: “Scottish retail sales remained in a funk last month, down by almost a fifth on the same period last year. This was the fourth successive month of double-digit decline. Last month’s performance lagged well behind that of the UK as a whole, unsurprising after more than three full months of lockdown. June did at least witness an improvement on recent lows, aided by the re-opening of many ‘non-essential’ shops in the final week of the trading period.

“Items which allowed people to carry on working or schooling from home continued to do well, such as laptops and accessories and home electricals. Whilst positive for some retailers, at least in the short term, any prolonged absence of office workers from our city and town centres has portents for stores in those areas who rely on such custom, and who may also have suffered from a loss of tourist traffic and students recently.”

He continued: “Home entertainment categories like gaming and toys also performed well, as did DIY and grocery. Clothing and footwear on the other hand continued to fare poorly, especially more formal attire and holiday-related items.

“Going forward, the permitted re-opening of shops, malls and eateries over recent weeks should help generate more shopper footfall and lift retail sales figures. However, more needs to be done in particular to bring the energy and footfall back into our city centres. Tens of thousands of shops and hundreds of thousands of jobs in retail directly and the supply chain more widely ultimately depend on the ongoing support of the Scottish public.

“That support from shoppers in the coming months will determine the future and vibrancy of our high streets and retail destinations for years to come. Early indications suggest that any retail revival may be slow and gradual.”

  • Read all of our articles relating to COVID-19 here.
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