Slender uptick for Scottish retail gross sales as inflation eats away at development
H
igh inflation successfully erased any actual enhance in retail gross sales final month, however Scots sprucing up their properties and gardens in time for summer time helped push the quantity into constructive territory.
In April gross sales north of the border had been 9.1% increased than the identical month final yr, the Scottish Retail Consortium mentioned on Wednesday, however when inflation was taken under consideration the determine slumped to a 0.3% year-on-year enhance.
David Lonsdale, the consortium’s director, mentioned that “Easter provided a slender but nonetheless welcome uplift in retail sales” final month.
“The real terms value of retail sales edged back into positive territory, after the decline witnessed in March, driven by health and beauty categories and as people spruced up their homes and gardens,” he mentioned.
The actual phrases worth of retail gross sales edged again into constructive territory, after the decline witnessed in March, pushed by well being and wonder classes and as folks spruced up their properties and gardens.
With inflation at among the highest ranges lately recorded, a proportion of the gross sales development is a mirrored image of rising costs fairly than elevated volumes.
The rising costs meant households in Scotland had been spending extra on groceries whereas different areas of spending had been shedding out, with classes like clothes and footwear, bigger furnishings, and electrical gadgets all shedding out.
But, Mr Lonsdale mentioned, there have been pockets of demand together with for vitality saving home equipment, gaming consoles, and gardening and DIY.
Total meals gross sales went up by 15.4% in comparison with April 2022, once they had gone up by 2.9%, in the meantime complete non-food gross sales elevated by 3.9% in comparison with the identical month final yr once they had climbed by 25.7%.
Mr Lonsdale mentioned: “Whilst overall inflationary pressures and more specifically food price rises have hopefully crested and will begin to ease, it’s too soon to say whether this will correspond with greater spending on more discretionary retail products,” he mentioned.
“After all, Scotland’s shoppers face several headwinds which may prove hard to shrug off and which could well crimp consumer spending, notably higher council tax and income tax and elevated mortgage rates.”
Paul Martin, UK head of retail at KPMG, mentioned client demand had up to now been “fairly resilient to the twin drags of high inflation and high interest rates” however warned as “Government energy support comes to an end for many, savings start to dwindle and other household bills rise, it is likely that the next few months will continue to be challenging as the consumer tank empties”.
“Much hinges on whether soaring food inflation can be brought under control enough to allow consumers to comfortably start spending again on non-essential items,” Mr Martin mentioned.
“Retailers will be hoping that the Coronation, coupled with a month full of bank holidays and inflation easing, will boost consumer confidence significantly enough to start to see real, profitable growth.”