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Summer fall for Scottish sales with shoppers spending less

Total retail sales in the country decreased by 0.3% last month compared to July last year.

Shoppers: Sales have fallen.

Sales in Scotland fell in July despite retailers offering discounts to consumers, latest figures suggest.

According to statistics published by the Scottish Retail Consortium (SRC) and KMPG, total retail sales in the country decreased by 0.3% last month compared to July last year, when they increased by 1.1%.

The fall is above the three-month average decline of 1.9% but below the 12-month average decline of 0.1%.

Scottish sales also decreased by 0.4% on a like-for-like basis compared with July 2018, when they increased by 0.1% – above the three-month average decrease of 2.4%.

There was however a rise in total food sales, with an increase of 1.8% against July the previous year, when they increased by 5.6%.

Adjusted for the estimated effect of online sales, total non-food sales decreased by 0.7% in July versus July 2018, when they had decreased by 0.5%.

On a three-month basis, online-adjusted total non-food sales decreased by 3.2% – below the UK non-food average decrease of 2.1%.

David Lonsdale, of the SRC, said: “The value of Scottish retail sales edged down last month, admittedly after a tough comparable July in 2018.

“The dip was at a much more modest rate than witnessed the previous month and comes after disappointing footfall figures unveiled earlier this week.

“Shoppers have kept a firm grip on their purses and wallets of late, with July rounding off an underwhelming three months for the industry. Indeed, over the past year as a whole retail sales have essentially been flat.

“Discounting was more prominent during the month, to the benefit of consumers but at a cost to retailers in terms of their profit margins.

“Bright spots in non-food categories were sales of larger electrical goods and furniture which had a reasonable month.

“The value of grocery sales increased, however much of this can be accounted for by rising food inflation. Clothing, footwear, and health and beauty categories all struggled.”

Mr Lonsdale added: “Looking forward, the big question is over the future direction of consumer spending.

“The coming few months are expected to be dominated by the spotlight on Brexit and big fiscal decisions in the UK and Scottish budgets. Retailers will be hoping policy-makers keep consumer confidence and household disposable incomes uppermost in their minds over the next few months.”

Paul Martin, of KPMG, said: “The latest figures will not provide much welcome news and the long-term outlook for Scotland’s high streets continues to remain challenging. Retailers witnessed a decline in total sales value of 0.3%, which is at least an improvement on the three-month average, offering a glimmer of optimism.

“Much of last month’s decline was mitigated by strong food sales and inflationary price rises, suggesting that it’s not a sudden change in consumer behaviour, which is behind the changing fortunes.

“For retailers, that should act as a clear sign that now, more than ever, is the time to develop a clear strategy focused on managing immediate cost efficiencies and exploring growth opportunities through new business models or partnerships that may not have been obvious in the past.”

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