Retail sales grew in August, report finds

Retail sales grew for the fourth month in August following a “successful summer” for retailers, according to a new report.

Food sales continued to do well, while the return to school boosted sales of children’s clothes, the SRC-KPMG Scottish Retail Sales Monitor for August 2018 found.

In August Scottish sales increased by 0.2% on a like-for-like basis compared to the same month the previous, when they had increased by 1.9%.

Total sales in Scotland increased by 0.5% compared with August 2017, when they had increased by 1.0%, matching the twelve-month average of 0.5%.

Adjusted for inflation measured at 0.1% by the BRC-Nielsen Shop Price Index (SPI), August sales increased by 0.3%.

Ewan MacDonald-Russell, Head of Policy and External Affairs at the Scottish Retail Consortium (SRC), said: “A fourth month of sales growth brings a positive end to a successful summer for Scottish retailers. Yet as the shadows lengthen with the nights drawing in, there will be some concern the same challenges we saw earlier in the year may return with strong grocery sales offsetting a fall in non-food sales.

“Food sales continued to do well, as consumers switched from summer favourites to more autumnal meals. Food sales were up by 3.8%, stronger than the rest of the UK, but not as strong as the record hit in July.

“In non-food we saw increased sale of homeware products as consumers moved from the garden back inside as the summer draws to a close. Electrical sales were slightly lower than normal, broadly reflecting many consumers bought new devices earlier this year for the World Cup and other big sporting events.

“However, there is still no sign consumers are refreshing their autumn wardrobes. All the indicators are consumers are still prepared to spend, but they have a limited amount of discretionary spending, and are carefully choosing each month what the priority is.”

The report found that total food sales in August increased 3.8% compared to August 2017, when they had increased by 4.1%, below the 12-month average of 4.3%.

Total Non-Food sales decreased 2.2% in August compared to August 2017, when they had decreased by 1.5%. This was above the 12-month average of -2.5%.

Paul Martin, UK Head of Retail at KPMG, said: “August can be a tricky month for retailers as summer sales draw to a close and shoppers wait for cooler temperatures to hit before investing in a winter wardrobe.

“The three-month trend shows Scottish non-food retail sales only grew 0.8%, even taking into account online sales. While this figure is low, it is still higher than the UK-wide average of 0.1%.

“Even with the impact of inflation, food sales increased at a slower rate than in July. Nevertheless, grocery bills continue to rise for many shoppers. On the non-food side, the return to school boosted sales of children’s clothes, while computer sales also spiked in August as consumers prepared for the start of university term times.

“Both the Edinburgh Fringe Festival and European Championships may have drawn in tourism throughout August, but this didn’t counteract the squeeze on consumer spending.

“While any growth is positive, retailers must continue to pursue repositioning, restructuring and transformation programmes to stay afloat.”