Retailers Hit As Food Sales Plunge To 16-Year Low
Food sales last month plunged to their worst performance in 16 years as deflation, poor weather and price promotions hit retailers, according to industry experts.
Food sales last month plunged to their worst performance in 16 years as deflation, poor weather and price promotions hit retailers, according to industry experts.
July's SRC-KPMG Scottish retail sales monitor found the cool, wet weather dampened sales of seasonal picnic and barbecue food, contributing to a fall in total food sales of 4.5% compared to the same month last year.
But across the retail sector, July was a tale of two markets'', with non-food sales recording their best month since October.
Overall last month, total Scottish sales decreased by 2.1% compared with July 2014, the monitor found. When they were adjusted for deflation, total Scottish sales were said to have decreased by 0.4%.
David Lonsdale, director of the Scottish Retail Consortium, said: This is a somewhat insipid set of figures with retail sales in Scotland in July notching down 0.4% compared to the same period last year, once falling shop price inflation is taken into account.
There was a further and stark polarisation in the sales performance of non-food and grocery items, with sales of the former rising at their fastest rate since October.
In contrast, grocery sales recorded their poorest results since the monitor started 16 years ago.
Accounting for a strong contribution from online sales, clothing and footwear did well with customers responding to end-of-season promotions.
Categories related to homes such as furniture and flooring saw modest growth thanks again to online sales.
However, grocery sales fared especially poorly in July, with the pace of decline accelerating and at a decidedly faster rate that the three-month average.
The continuing lean period for grocery retailers won't have been helped by a dearth of sporting successes this summer which often help drive celebratory purchases of food and drink, or the lack of sales of barbecue-related fayre.''
Mr Lonsdale said the figures demonstrate the need for government to support the retail industry, which accounts for more than 250,000 jobs in Scotland.
Analysis of the grocery sector last month found total food sales down 4.5% on July last year.
This was the deepest decline recorded since the inception of the monitor in January 1999,'' the latest report said.
It went on: In a month usually rich in picnics and outdoor parties, the cool and wet weather didn't help the sales of seasonal food.
The comparison with last year was also tough because the Commonwealth Games held in Glasgow in the last two weeks of July 2014 attracted a lot of watchers and stimulated trade last year.''
David McCorquodale, head of retail at KPMG, said: The tale of two markets continued in July with food and non-food pulling in different directions.
Fashion and footwear led the charge of positivity in the non-food segment with online channels providing the perfect relief from the rain and helping non-food sales record their best month since October last year.
Not all sales were driven by discounts and the new season fared well. Spending on home categories also improved with a healthier housing market.
Food sales plummeted to their worst performance since records began in 1999 as deflation, weather and price promotions proved to be a nasty brew for the grocer and a tonic for the consumer.''