Scotland's Sales Down Due To Weather

22 July 2015, 08:07

Poor weather and declining consumer confidence have hit sales in the shops this summer, according to retail experts.

Shops also face further challenges ahead with increased costs introduced by the summer Budget, analysts KPMG said.

Sales in Scottish stores decreased by 1.7% compared with June 2014, when they had decreased by 1.1%, according to the Scottish Retail Consortium (SRC).

Like-for-like sales decreased by 2.2% on last June, when they had decreased by 2.6%.

David McCorquodale, head of retail at KPMG, said: "Scotland's mixed weather and declining consumer confidence held back retail sales throughout June as retailers drove volume through heavy promotions.

"Whilst the rest of the UK enjoyed more settled weather and strong sales growth, Scotland's tills were rather more muted this month.

"That said, when adjusted for online sales, non-food sales showed their strongest growth since November last year.

"The bright spots were in the home categories, where bigger ticket sales were welcomed, and in health and beauty as consumers stocked up for travelling to the sunshine.

"After a poor May, fashion sales did better in June but clothing retailers will be looking for a more sustained period of warm weather to bring a strong close to the summer season.

"Grocery sales continue to decline at a greater rate than the rest of the UK and with tough comparables ahead due to last year's sporting events, the road to recovery in this segment continues to be hard.

"With many positive economic indicators emanating around employment, wages and housing, Scottish retailers will be keen to see these working their way to the High Street before they themselves face the increased costs introduced by the summer Budget.''

David Martin, head of policy and external affairs at SRC, said: "Online purchases really drove non-food sales in June, with the best performance for over six months.

"Some of this success will have been at the cost of retailer margins as end-of-season sales were brought forward to offset a disappointing sales performance in May.

"Nonetheless, consumers did respond well to retailers getting the offer right, particularly on clothing and footwear, whilst online provided greater visibility of stock availability and more opportunity to compare promotions.

"Travel products also sold well as consumers stocked up on holiday essentials preparing their escape from a cool and overcast Scotland for warmer and sunnier climes.

"Although non-food purchases performed comparatively better in June, consumer confidence slipped back in Scotland, opening up a significant gap in confidence north and south.

"Retailers will be hoping that some of the measures outlined by the Chancellor in his budget earlier this month will help to close this gap as households start to feel the benefit of measures like the continued freeze in fuel duty and increased personal tax allowance.''