Cost of living: Scottish retail sales edge higher but Christmas countdown critical to survival

Scottish retail sales nudged higher last month, new industry figures reveal, but non-essential spending is likely to come under pressure in the run-up to Christmas as purse strings are tightened.

Releasing its latest sales monitor, the Scottish Retail Consortium (SRC) said total sales north of the Border increased by 6.2 per cent in August, compared with the same month last year. However, adjusted for the effects of spiralling inflation, the year-on-year change was just 1.1 per cent.

Total food sales increased by 10.3 per cent, year-on-year, though total non-food sales growth was just 2.8 per cent. Adjusted for the estimated effect of online sales, the total non-food gain was a mere 0.1 per cent, well below the three-month average rate.

David Lonsdale, director of the SRC, said: “The value of retail sales in Scotland edged up in August, even when adjusted for shop prices being at a record high. Growth was seen in both food and the more discretionary non-food categories, albeit the latter slowed somewhat.

Shoppers out and about in the centre of Glasgow. Picture: Jane Barlow/PA

“Demand for clothing and footwear, especially for back-to-school ranges, was weaker than expected albeit sales of warmer clothing including knitwear increased. Sales of larger items of furniture and home furnishings cooled.”

Paul Martin, partner and UK head of retail at KPMG, which helps to produce the monthly sales monitor, said: “A warm Scottish summer combined with rising prices caused August sales to grow by 6 per cent year on year, but when inflation is considered, the cost-of-living crisis is clearly starting to have a real impact on spending.

“Households across the country will be taking a long hard look at budgets over the coming months, in order to factor in the increased cost of energy and double-digit inflation. With Christmas just three pay days away, it’s likely the brakes will be firmly applied on non-essential spending for most people.”

He added: “Many retailers will be bracing for consumers tightening their belts at a time when their own margins are under pressure from rising costs. Supporting customers through these difficult times will be paramount for the health of the sector as we move through the rest of this year.”