Retail Sales Fall 1.6% Over Year

Falling sales figures from Scotland's high streets show shoppers remain cautious, retail chiefs said.

Total sales in May were 1.6% lower than they were a year ago, with like-for-like sales - which strip out factors such as new store openings - down by 2.7%.

The figures, in the latest Scottish Retail Sales Monitor report, contrast with the situation across the UK as whole, with like-for-like sales up 0.4% and total sales 2% higher than in May 2013.

David Lonsdale, director of the Scottish Retail Consortium, said: "Despite the return of shoppers to Scotland's high streets last month, the growth in footfall simply didn't filter through into an increase in the overall value of retail sales. Scottish consumers clearly remain cautious.''

David McCorquodale, head of retail at KPMG, said: "May's retail figures in Scotland are disappointingly weak due to three factors - a competitive grocery market, mixed weather and localised caution when spending on bigger ticket items.

"Consequently, the last quarter's total sales have declined despite the last year showing an increase.''

Total food sales in Scotland last month were 2% lower than May 2013, with like-for-like sales down by 3.7%.

Non-food items fared slightly better, with total sales down 1.4%, while like-for-like sales were 1.9% lower than they were last May.

Clothing and footwear was the best performing sector in Scotland for retail for the seventh month in a row, but despite this it had its lowest growth rate since October.

It was, however, the only sector to report growth in total sales for May, with stores reporting "good interest'' in their summer fashion ranges.

Mr Lonsdale said: "Clothing and footwear retailers who offered good ranges continued to perform well off the back of new seasonal lines.

"Adjusted for the contribution of online retailing, non-food sales in general increased, however shops reported that sales of items for homes and gardens dipped in May. This, coupled with continuing keen prices and promotions for food, ensured that the total growth of sales in Scotland was weaker than across the UK as a whole.''

He added: "Retailers will of course work hard to ensure this slowdown is only temporary. Government at every level can assist by pursuing policies which put money into people's pockets, keep down the cost of doing business and help retailers expand and create jobs.''

Mr McCorquodale added: "Discounts offered by grocers are being snapped up by cost-conscious consumers but, from the retailer viewpoint, these are depressing sales, and consequently margins and the situation is likely to persist in the short term.

"Fashion and footwear fared best in the non-food category which, adjusting for the inclusion of online sales, would have shown growth, albeit muted by mixed weather. However, with the gap widening between Scotland's non-food growth in the last quarter and that of the rest of the UK, it appears that the recovery in the South East has yet to gain strength north of the border in terms of meaningful spend in household goods.''

A Scottish Government spokesman said: "The Scottish Retail Consortium survey indicates that retailers have had a challenging month in May, however it also highlights a positive 12 month average growth in total sales.

"This is consistent with results from the latest Scottish Retail Sales Index, which showed retail sales performance had grown over 2013-14, during which time the Scottish economy experienced its fastest growth since 2007.

"The latest Bank of Scotland PMI survey has indicated that Scottish private sector activity expanded for the 20th consecutive month in May, whilst Ernst and Young reported that foreign direct investment to Scotland was at a 16-year high.

"All of this points to the underlying health in Scotland's economy, which is helping to create more jobs and opportunities. Scotland continues to outperform the UK across employment and inactivity rates, with an unemployment rate equal to that in the UK.''

He added: "We are committed to maintaining and building sustainable economic growth in Scotland, and delivering the most competitive business environment anywhere in the UK.

"However, it is only with independence that we could create a genuinely appropriate set of complementary policies - in relation to taxation, innovation and labour market regulation - to secure stronger levels of economic growth and job creation from which everyone in Scotland would benefit.''


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