Retail sector challenges remain despite good weather boost, report finds

The sunnier weather gave retailers a lift last month but Scotland's high streets are struggling to achieve sustained growth, according to the latest analysis.

Published 15th Jun 2016

The sunnier weather gave retailers a lift last month but Scotland's high streets are struggling to achieve sustained growth, according to the latest analysis.

Figures showed the fashion, outdoor living and health and beauty sectors all received a boost from May's warmer weather, and grocery retailers also had a better performance.

Total in-store sales declined overall, though, suggesting the retail sector "still has its challenges".

The figures for the four weeks of May are contained in the Scottish Retail Consortium (SRC) - KPMG retail sales monitor.

It found that total Scottish sales decreased by 0.3% last month compared with May 2015.

May's performance was the best since December, driving up the 12-month average to -1.7% from -2% in April.

Overall food sales were down 0.7% over the same period while non-food sales held virtually steady with a drop of 0.1%.

But when adjusted for the effect of online sales, total non-food sales were actually found to have increased by 2.6% - the best performance since August 2014.

SRC director David Lonsdale said: "These figures are a welcome improvement on April's rather poor results, however despite one month's positive data the retail market in Scotland continues to struggle to show sustained growth.

"Real-terms sales saw a modest rise of 1.5%, with non-food outstripping grocery.

"Non-food sales were much improved from last month, driven by improved clothing and footwear sales, and slightly raising the three-month average to 0.5%.

"The main driver continues to be online sales, demonstrating the continued importance of digital retailing."

Mr Lonsdale said grocery sales continue to be weak and that market remains "challenging".

The data shows that clothing retailers were pleased with the increasing demand for dresses, swimwear and summer accessories.

Canvas shoes and sandals performed well, as did children's footwear.

Skincare and slimming products helped to drive growth in the health and beauty category.

David McCorquodale, head of retail at KPMG, said: "Rays of sunshine boosted Scottish sales in May, lifting 12-month averages across the board and providing some long-sought relief for retailers.

"Despite the relatively improved performance, total in-store sales in Scotland still declined, providing evidence that the sector, as a whole, still has its challenges."