Miserable weather and economic news in July saw retail sales across Scotland fall sharply with a warning of further misery to come, figures from the Scottish Retail Consortium (SRC) have revealed.
Instead of hitting the high street to purchase new summer wardrobes, retailers slashed prices to attract shoppers to stores.
Customers also ignored summer food ranges and instead looked to traditional warming foods in supermarkets.
While sales in July increased by 4.6% compared with July 2022 (4.4%), growth was well below the three-month average increase of 9.1% and the 12-month average growth of 8.5%, resulting in an overall year-on-year drop in sales of 3%.
But the SRC has warned the “dual burden” of high inflation and rising interest means July may not be the last month of disappointing sales in the near future.
The body also say a high portion of sales growth may be a reflection of rising prices, rather than increased volumes.
Food sales increased by 9.1% compared with July last year, when they had increased by 5.3% which was below the three-month average growth of 13.9% and the the 12-month average growth of 12.5%.
Non-food sales increased by 0.9% last month but this is a fall compared to the same period last year, when non-food sales rose by 3.7%.
Taking online sales into account, total non-food sales decreased by 2% last month versus the same period last year, when they had increased by 1.9%.
This is below the three-month average growth of 3.6% and the 12-month average of 3.7%.
Ewan MacDonald Russell, deputy head at the Scottish Retail Consortium, said: “Sales sharply fell in July as the miserable economic news combined with unseasonable weather to heap misery on shops.
“Real term sales fell by 3%, an abrupt reversal following positive figures in June, as the impact of inflation on retail volumes is now being reflected in the falling value of sales.
“With that in mind, politicians need to be realistic on what policy measures they bring forward in the coming months, as it’s certain any further costs will be passed onto hard-pressed consumers.
“It’s quite likely a difficult few months are ahead for Scotland’s already hard-pressed retail industry.”
Paul Martin, partner, UK head of retail at accountancy firm KPMG, said: “A damp and blustery July prompted Scottish shoppers to seek shelter indoors and tighten their purse strings.
“Total sales growth eked out a modest 4.6% increase in July, set against a backdrop of 10% inflation.
“On the high street home goods took the lead as the best-sellers.
“However, due to the poor weather, restocking summer wardrobes took a back seat, resulting in many clothing categories experiencing negative sales trends.
“A few select categories, including furniture, health, and beauty, defied the trend and performed well.
“We’re seeing a substantial increase in promotions as retailers look to attract shoppers and maintain market share.
“Consumers mindful of prices are shopping more selectively, impacting retail margins and profitability.
“Despite their resilience during the cost-of-living crisis, Scottish consumers may face challenges in sustaining spending due to persistent high inflation and rapidly rising interest rates throughout the rest of the year.
“Both consumers and retailers are finding that they are having to get used to doing more with less as conditions remain incredibly challenging.”