Scottish RSM: Summer sales fail to soar for Scots retailers

David Lonsdale, Director, Scottish Retail Consortium:

Scottish retailers suffered a hat-trick of falling sales figures during the three months of this summer as August sales dipped below the previous year's performance. However, the small 0.2 percent real terms fall was an improvement on July giving hope things might pick up as trading moves into the Autumn.

Back to school sales were disappointing as consumers looked to save by switching to pre-loved items, an area retailers are increasingly involved in. Food sales were flat, but against very strong figures from last year when inflation was running hot, indicating grocers may have to adapt to more normal conditions.

Unfortunately, whilst trading is stagnant new government initiatives remain a concerning growth area. This week's Programme for Government will be a test to see if Scottish Ministers are paying attention to the travails of the business community, who are already grappling with the implications of the new UK administration’s legislative programme . If there are further significant or unreasonable regulatory burdens announced then industry will question whether the government is truly focused on Scotland's economic recovery.

Linda Ellett, UK Head of Consumer, Retail and Leisure , KPMG:

Despite summer finally making an appearance, and a slight uptick in consumer confidence, shoppers did not catch-up their spending during August, with a slight dip in sales growth reflecting the challenging retail environment that is likely to dominate for the rest of this year.

Consumer sentiment is gradually starting to improve, but there still remains some nervousness around potential tax rises and the cost of putting the heating back on when the cooler weather arrives. The fragile nature of consumer confidence means shoppers will continue to be driven by price and value, moving from brand to brand to find the best price benefit and we are likely to see retailers using promotional activity to seek to win at this.

Retailers looking to seize on slowly returning consumer confidence will need to demonstrate best value for money, as well as tap in to the “experience” factor as consumers focus their discretionary spend on having fun or experiences over owning more ‘stuff’. Winning retailers will need clear differentiation, targeting specific consumer needs, and executing with consistency and clarity.

In August 2024, sales continued to decline compared to the start of the year, but there are signs of stabilisation when compared to the previous two months, June and July 2024. Although negative growth remains, the slower rate of decline in August may indicate potential stabilisation or gradual improvement if this trend persists. Despite this, overall performance is still weaker than earlier in the year, highlighting the need for sustained efforts to reverse the downward trend and regain positive momentum...

Asim Dey, Analyst