SCOTTISH retail sales rose at the sharpest year-on-year pace since early 2014 in June, exceeding the UK-wide rate of increase for the first time since summer 2013, as glorious weather and World Cup football boosted spending.
The latest monthly figures from the Scottish Retail Consortium, published today, show the value of sales north of the Border last month was up 2.7 per cent on June 2017. Figures published last week by the British Retail Consortium showed year-on-year growth in retail sales value in the UK as a whole in June was 2.3%.
Hot and sunny weather also boosted the hard-pressed Scottish retail sector in May, when the value of sales was up by 2.6% on the same month of last year.
However, the SRC emphasised conditions remained “very
challenging” for the retail sector. It also highlighted significant discounting of fashion and footwear stock by retailers to persuade hard-pressed consumers to spend.
The year-on-year increase in Scottish retail sales value in June – the strongest since January 2014 – was driven mainly by food and drink. The food category recorded 4.8% year-on-year growth in retail sales value in June.
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However, the non-food category managed a year-on-year increase in retail sales value for a second consecutive month in June. Non-food sales value had, before May, shown year-on-year falls for a protracted period.
The last time Scotland’s year-on-year growth in total retail sales value outpaced that in the UK as a whole was in July 2013, according to the SRC figures.
Continuing pressure on household finances was underlined yesterday by data from the Office for National Statistics showing average weekly earnings for employees in Great Britain in the March to May period were up by 2.5% year-on-year in nominal terms, including bonuses.
This was the weakest year-on-year rise in average earnings since the three months to November last year.
Adjusting for inflation, average earnings were in the March to May period up by just 0.2% year-on-year in real terms.
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Ewan MacDonald-Russell, head of policy and external affairs at the SRC, said: “Some superb weather and a bumper summer of sport saw retail sales continue to shine in June … Scots, perhaps unused to one of the hottest Junes in a century, sought out drinks, fans, barbecues and paddling pools to cool off and enjoy the sunshine.”
He added: “Consumers were keen on picnic and barbecue food, reflecting the unusual opportunity to consistently eat outside. There were also strong drinks sales due to the weather, but also as a result of the series of sporting events on television, not least the World Cup.
“It was heartening to see a second month of non-food sales growth after a difficult start to the year. Outdoor furniture, sunblock and skincare products, and televisions, all saw very good sales.”
However, Mr MacDonald-
Russell highlighted a continuing need for retailers to offer heavy discounts to tempt consumers, against the backdrop of pressure on household finances.
He said: “Even in these
conditions, fashion and footwear items were often significantly reduced to encourage sales, indicating consumers are still working within tight household budgets.”
Paul Martin, UK head of retail at accountancy firm KPMG, said: “Soaring temperatures across Scotland, coupled with the World Cup action, are likely to have boosted sales, with outdoor furniture, seasonal clothing and [barbecue] food and drink flying off the shelves. Grocers particularly benefited from the brighter weather. Shorts, dresses and sandals were likely to have been popular.”
However, observing retailers would still have had to entice
shoppers with deeper discounts, he added: “Despite the uptick, the woes of the high street continued in June, with sales not necessarily guaranteeing profit. “
Mr MacDonald-Russell said: “Overall retailers will have welcomed some relief. However, the reality is things are still very challenging for the retail industry. The big question is whether
shoppers will continue to act so positively once the weather returns to normal.”
Mr Martin said: “June’s warmer weather may have provided some welcome relief, but we know it’s not likely to last.”
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