Inflation "cancelled out true growth" in Scottish shops to bring only a marginal improvement in retail sales in real terms last month.
It comes amid a “polarisation” of performance between food and non-food items as people spend more on groceries amid the cost-of-living crisis, the Scottish Retail Consortium and KPMG monthly retail sales monitor.
It found total sales in Scotland increased by 9.1 per cent compared with April 2022, when they had grown 15.3%. Adjusted for inflation, the year-on-year growth was 0.3%.
Total food sales increased by 15.4% set against April last year, when they had increased by 2.9%. April was above the three-month average growth of 14.3% and the 12-month average growth of 9.9%.
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Total non-food sales increased by 3.9% in April compared with April 2022, when they had increased by 25.7%. Adjusted for the estimated effect of online sales, total non-food sales increased by 2.5% in April against April 2022, when they had increased by 18.8%.
David Lonsdale, director of the Scottish Retail Consortium, said Scotland’s shoppers “face several headwinds which may prove hard to shrug off and which could well crimp consumer spending”, including higher council tax and income tax and elevated mortgage rates.
“Easter provided a slender but nonetheless welcome uplift to retail sales in Scotland last month,” said Mr Lonsdale.
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“The real terms value of retail sales edged back into positive territory, after the decline witnessed in March, driven by health and beauty categories and as people spruced up their homes and gardens.
“However, the figures reveal a continued and indeed more pronounced polarisation of performance between food and non-food categories. With households spending more on groceries due to elevated levels of inflation, the consequences of this can be seen with more discretionary spending areas losing out, with volumes declining."
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He added: "This has been particularly felt in categories such as clothing and footwear, larger furniture, and electricals which have all lost out as a result. That said, there were pockets of demand including for energy saving appliances, gaming consoles, and gardening and DIY.”
It is “too soon to say” whether a price crest would lead to greater spending, he added.
Paul Martin, KPMG head of UK retail, said: “Retail sales in Scotland held steady in April with decent growth of 9.1%, but when stacked against a background of higher inflation year-on-year, the figure drops to 0.3%, cancelling out any true growth.”
He added that “consumer demand has so far been fairly resilient to the twin drags of high inflation and high interest rates” but “the next few months will continue to be challenging as the consumer tank empties”.
“It was a mixed bag for retailers, with food sales the biggest growth area, aided by the Easter weekend and family gatherings. Noticeably, clothing and footwear sales didn’t perform as strongly as may have been expected at this time of year, which is likely down to a lack of sunny days across the country last month.”
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