Value edges up despite continuing price deflation
AFTER months of near relentless decline the value of sales of food in Scotland increased in June compared to the same period last year, according to the latest figures from the Scottish Retail Consortium / KPMG Retail Sales Monitor.
And if the jump, of just 0.1, looks modest at first glance it is significant when put into the context of substantial food price deflation.
The British Retail Consortium-Nielsen Shop Price Index suggested food prices dropped by 0.8%. And that means the real terms increase in the value of Scottish food sales was 0.9%.
It was the first reported year-on-year increase in the value of Scottish food sales this year and only the third time in the last two years that sales have shown growth.
However, there could be some special circumstances influencing the growth.
The June period included a hot spell, especially in the south-west of the country, early in the month, which could have boosted sales. And the research period, which actually ended in early July, also included some major free-to-air sporting events including much of the Euro 2016 football tournament and part of Wimbledon fortnight.
And the Retail Monitor partners warned that the Brexit vote and the UK’s impending departure from the European Union could have significant influence on food sales in the future.
In marked contrast to the performance of food, non-food sales through retail outlets in June were considerably lower than the previous year, down by 2.4% and even when adjusted to take account of the non-food retail business that has moved online the figure was still down by 0.5%.
Ewan MacDonald-Russell, head of policy and external affairs at the Scottish Retail Consortium said: “These June figures show Scotland is still some way from sustained retail sales growth.
“Food sales were stronger, growing by nearly one per cent. However, this was slightly offset by lower non-food sales, with clothing and footwear performing relatively poorly.
“It’s far too early to tell whether the vote on membership of the European Union will have an impact on retail sales and shop prices.
“Scottish retailers remain open for business, and the vote has not changed their commitment to deliver for customers.
“However, there are signs that customer confidence may have faltered since June 23.
“Therefore, it’s important the Scottish Government gives careful consideration to how it can use its economic powers, for example on business rates and the Apprenticeship Levy, to support Scottish retailers and grow the wider Scottish economy.”
