Scottish sales slump amid "unending Brexit gridlock" and uncertainty

17 July 2019, 06:00

Sales in Scotland have fallen by 3.1% compared to last year, with retailers fearing that "unending Brexit gridlock and stagnation" has hit consumer confidence.

The Scottish Retail Consortium (SRC) warned that there is a "clear trend" of consumer spending falling amid concerns about the political climate.

Total sales in Scotland dropped by 2.3% from June 2018, a like-for-like decrease of 3.1%, with declines for all non-food items.

Describing the findings as "very troubling", Ewan MacDonald Russell from the SRC explained that shoppers are restricting their discretionary spending towards essentials.

"The SRC remains concerned the intense political and economic volatility, along with the prospect of further costs resulting from government policy, is discouraging consumption," Mr Russell said.

He added: "The consequence of the unending Brexit gridlock and stagnation is reduced confidence amongst retailers and consumers - which can only reduce overall growth.

"A resolution which protects the friction and tariff-free trade the retail industry depends upon is urgently needed; along with renewed domestic policy measures to stimulate supply-side growth."

Describing the trends from the last three months of data, Mr Russell said: "Food sales continue to slide, with a real-terms fall this month once inflation is stripped out.

"There is also evidence consumer trends are very different this year, with shoppers swapping frozen and barbecue food for more warming alternatives.

"Non-food also saw this phenomenon, with home products outperforming last year at the expense of outdoor goods.

"Fashion sales continue to be quite poor, however, with retailers reporting even discounted products under-performing expectations."

Paul Martin, the UK head of retail at accountancy firm KPMG, added: "The latest figures provide further evidence that growing economic and political uncertainty is taking its toll on Scotland's high streets.

"With like-for-like sales falling 3.1% compared to last year, the rate of decline isn't quite as sharp as what we witnessed in May, but the overall picture offers little optimism for a sector that's already facing wide-ranging challenges.

"While non-food sales fell victim to the largest dip, food retailers are far from immune from the difficult trading conditions, with another flat performance.

"The rate of decline across the sector is now outpacing the rest of the UK. With signs that trend could be set to continue, the coming months could be particularly difficult for the industry."