Scottish retail sales experienced a significant boost in June, with clothing and footwear leading the way. According to the Scottish Retail Consortium, total sales in Scotland increased for the second consecutive month, reaching their highest level since December. Despite lower footfall due to sunny weather and high rates of inflation, the numbers remained impressive.
Compared to the previous year, total Scottish sales jumped by 11.3%, a considerable improvement from the more modest 4.4% growth seen in 2022. Adjusted for inflation, the year-on-year growth reached 2.9%, surpassing the three-month average increase of 10.5% and the 12-month average growth of 8.5%. Like-for-like sales also experienced a significant increase of 8.5% compared to a rise of 3.3% in June 2022.
In the non-food category, sales increased by 7.5% compared to the previous year’s growth of 5.8%. Adjusted for the estimated impact of online sales, non-food sales increased by 6.9% compared to a dip of 1.4% in the previous year. This solid performance can be attributed to aggressive discounting by retailers and consumers preparing for summer holidays.
The stars of the non-food category were clothing and footwear, with retailers offering attractive discounts and Scottish consumers seeking vacation essentials. However, despite this positive trend, consumers appeared to prioritize clearance sales items, showing less interest in in-season or full-priced stock. This indicates that shoppers are focused on purchasing what they need immediately, as demonstrated by weak demand for larger household items.
Paul Martin, Partner at UK Head of Retail KPMG, noted the positive impact of record temperatures on Scottish retailers. Sales of suntan lotion, food, and clothing all received a boost as consumers made the most of the sunny weather. Despite steady retail sales growth of around 9% in the first half of the year, the retail sector faces challenges such as higher inflation levels, reduced margins, and a slower-than-expected economic recovery. Martin warns that further interest rate hikes, double-digit food inflation, and a slower economy could hinder the sector’s return to profitable growth.
Overall, the retail sector in Scotland has shown resilience in the face of challenging conditions. The surge in sales for clothing and footwear indicates that consumers are seeking value through discounted items, especially during the summer holiday season. Retailers should stay mindful of consumer preferences and adapt their strategies accordingly to maintain growth in the dynamic retail landscape.
Sources:
– Scottish Retail Consortium: [link](insert link here)
– KPMG: [link](insert link here)
