Food Sector Helps Retail Sales Return To Growth

16 August 2017, 05:27

edinburgh shoppers

Retail sales in Scotland returned to growth in July after a decline the previous month.

Food sales helped drive the 1.3% increase on a like-for-like basis, which excludes new store openings, compared to July 2016.

Total sales for the month were up 0.7% compared to the same period the previous year, according to the Scottish Retail Consortium-KPMG Scottish retail sales monitor.

Adjusted for deflation, measured at 0.4%, overall July sales grew by 1.2%.

Food sales were up 4.2% year on year, while non-food sales fell by 2%.

David Lonsdale, Scottish Retail Consortium director, said: "Retail sales in Scotland witnessed a welcome resumption to growth last month, turning in a creditable performance driven by grocery sales and a better showing from non-food categories.

"Adjusted for shop price inflation, which has continued to fall, this was the best performance for three months and the second strongest this year."

He credited the food sales performance in part to inflation arising from food commodity prices and the exchange rate, but said non-food categories continue to "struggle", excepting high demand for back-to-school clothing, footwear and gaming consoles.

He added: "Looking forward, retailers will be questioning whether even this modest level of sales growth might prove fleeting, given mounting concerns about overall inflation and the impact on increasingly cash-strapped consumers."

Craig Cavin, head of retail in Scotland for KPMG, added: "As is becoming a common theme, food sales contributed most to the overall growth of Scottish retail sales in July, whilst non-food sales once again contracted.

"However, there were signs that the tide was beginning to turn for non-food sales - no doubt bringing with it a much needed sense of optimism for the industry."