SRC & KPMG: Tepid June a disappointment for Scots retailers

SRC & KPMG: Tepid June a disappointment for Scots retailers

Scottish retail sales experienced a significant decline in June 2024, dropping by 3.6% compared to the same period last year.

This was below the 3-month average decrease of 2.5% and below the 12-month average growth of 1.9%. This downturn affected both food and non-food sectors, with consumers seemingly prioritising experiences over shopping. 

Total food sales decreased by 1.1% versus Jun 2023, when they had increased by 15.8%. June was below the 3-month average decrease of 1.2% and the 12-month average growth of 4.6%. The 3-month average was below the UK level of 1.1%.

Total non-food sales decreased by 4.8% in June compared with June 2023, when they had increased by 7.5%. This was below the 3-month average decrease of 3.6% and below the 12-month decrease of 0.3%.

Adjusted for the estimated effect of online sales, total non-food sales decreased by 0.5% in June versus June 2023, when they had increased by 6.9%. This was below the 3-month average decline of 4.2% and the 12-month average decline of 1.5%.

Ewan MacDonald Russell, deputy head of the Scottish Retail Consortium, said: “Scottish retailers will be glad to see the back of June after a miserable trading performance. Retail sales fell by 3.6% in real terms as Scots appeared to focus on experiences ahead of shopping.

“Food sales fell back across the month, possibly a sign consumers have a little more financial headroom after a year of responding to food price inflation. However, there was little evidence of a switch to high street spending, with summer clothing and footwear ranges particularly struggling. There was a small uplift in technology sales, a combination of sports fans acquiring new televisions for the Euros and consumers replacing pandemic purchases.

“Retailers will be hoping this is a blip, caused by unseasonably cold weather and Scots travelling to concerts, events, or the Euros. However, after a tepid second quarter of trading, shop owners will hope for brighter days ahead.

“With the general election now behind us it is essential politicians start to take action to boost economic growth to help consumers whilst keeping the cost of business down for hard pressed retailers.”

Linda Ellett, UK head of consumer, retail and leisure at KPMG, said: “Summer may finally have arrived, but Scottish shoppers are still reticent to spend, with sales falling by 3.6% relative to June last year.

“Despite improved weather in some cases, all areas from food and drink to clothing and footwear saw sales fall compared to last year.

“Despite pressure on household finances easing, with petrol and energy costs and shop price inflation all continuing to fall, consumers remain incredibly reluctant to take the brakes off of their spending. The stimulus of good weather, Wimbledon and Euro 24, which was hoped would drive consumer spending, has so far failed to materialise and financial concerns remain with many households.

“Retailers, who are running to stand still at the moment, having exhausted all of the levers they have at their disposal to cut costs and drive sales via promotions, will be looking to the new Government to boost the economy and confidence.

“The overall economic conditions may slowly be improving, but the health of the sector remains fragile, and action is needed now to help support this vital economic contributor – particularly around neglected areas such as business rate reform.”

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