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SRC and KPMG: Tepid June a disappointment for Scottish retailers
Scottish retail sales suffered a significant decline in June 2024, falling by 3.6% compared to the same period last year.
This was below the 3-month average decline of 2.5% and below the 12-month average decline of 1.9%. This decline affected both the food and non-food sectors, with consumers seemingly prioritizing experiences over purchases.
Total food sales decreased by 1.1% compared to June 2023, when they increased by 15.8%. June was below the 3-month average decline 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 to June 2023 when they 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 0.5% in June compared to June 2023, when they increased 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 happy to see the end of June after a miserable trading performance. Retail sales fell 3.6% in real terms as Scots appeared to focus on experiences ahead of shopping.
“Food sales fell over the month, possibly a sign that consumers have a little more financial headroom after a year of responding to food price inflation. However, there was little evidence of a shift to spending in high street stores, with summer clothing and footwear lines particularly struggling. There was a small increase in technology sales, a combination of sports fans snapping up new televisions for euros and consumers replacing pandemic purchases.
“Retailers are hoping this will be a setback, caused by unseasonably cold weather and Scots travelling to concerts, events or the European Championship. However, after a tepid second quarter of trading, shopkeepers are hoping for better days ahead.
“With the general election now behind us, it is essential that politicians start acting to boost economic growth to help consumers, while keeping business costs low for struggling retailers.”
Linda Ellett, UK head of consumer, retail and leisure at KPMG, said: “Summer may finally be here, but Scottish consumers are still reluctant to spend, with sales down 3.6% compared to June last year.
“Despite the improvement in the weather in some cases, all areas, from food and beverages to clothing and footwear, saw sales fall compared to last year.
“Despite the pressure on household finances easing, with petrol and energy costs and shop price inflation continuing to fall, consumers remain incredibly reluctant to take the brakes off their spending. The stimulus from good weather, Wimbledon and Euro 24, which was expected to boost consumer spending, has so far failed to materialise and financial worries remain with many families.
“Retailers, who are rushing to stand still at the moment, having exhausted every lever they have at their disposal to cut costs and boost sales through promotions, will be looking to the new government to boost the economy and confidence.
“Overall economic conditions may be slowly improving, but the health of the sector remains fragile, and action is needed now to help support this vital economic contributor – particularly in neglected areas such as business rates reform.”