Food retailers faring best in Scotland

19 July, 2012

Food sales in Scotland during June helped to achieve a 1.2% growth in total sales compared to the previous year.

The latest report from the Scottish Retail Consortium (SRC) and accountancy giant KPMG revealed food sales in the region had risen above those of June 2011 on a like-for-like basis. However, the wet weather and food inflation were said to have affected overall sales and volumes of goods.

Richard Lim, SRC economist, said: “June’s prolonged wet weather has caused Scottish retail to stagnate. Consumers remain cautious about their personal finances, and lower temperatures have cooled demand for summer fashions and outdoor leisure goods. With shops full of seasonal stock, retailers are hoping a possible Indian summer delivers some salvation.

“Food and drink retailers are faring the best in a weak market, but when inflation is taken into account, volumes of sales are likely to have declined. There was a boost in the run-up to the Jubilee celebrations as shoppers bought in party foods for the long weekend, but it wasn't on the same scale as seen in our UK-wide statistics.”

June was the 15th month in a row where UK sales growth exceeded Scotland’s overall figures.

David McCorquodale, head of retail in Scotland for KPMG, said: “On first appraisal, June appears to have been a better month for Scotland’s retailers, with total sales increasing slightly by 1.2% on the corresponding period in 2011. However, this statistic does not tell the whole story for retailers, as much of that rise comes from increased food sale values, which continue to be driven by inflation rather than volumes.

“A number of factors are combining to make times particularly challenging for retailers and the vast majority are now resorting to heavy and sustained promotional campaigns, which impact negatively on margins, just to tread water.”





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