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Further slump in non-food sales

Shops suffer hit from rising prices and rain

Prince St retail shoppingScottish retailers suffered a double whammy of rising prices and the wettest June for more than a century.

Sales of non-food items fell 4.2% last month, described as “something of a bleak trend” shops tried to cope with rising import costs and poor weather.

Despite inflation falling last month, retailers are preparing for it to hit 3% by the end of the year.

Craig Cavin, head of retail in Scotland at KPMG which compiled the latest data, said: “Scottish retail’s struggle continued in June, and the figures paint a familiar picture – strong food sales negated by poor non-food performance.

“The drop in non-food sales, down 4.2% compared to last year, is becoming something of a bleak trend, whilst poor sales in summer ranges and the late arrival of some discounts put a dent in clothing figures. Elsewhere in non-food, the dreich weather impacted on sales of outdoor furniture.

“We should know not to rely on summer sunshine in Scotland or risk disappointment, but a gloomy month has taken its toll nonetheless. The effect of Scotland’s wettest June in over a century was felt across the industry.

“Phones, tablets, games, and health and beauty products were a ray of sunshine through the clouds, but retailers will look for non-food performance to pick up if the sector is to make gains.”

Ewan MacDonald-Russell, head of policy & external affairs at the Scottish Retail Consortium, added:A disappointing June for retailers as nervous customers continue to postpone discretionary spending due to squeezed household incomes and worries about the economy.

“Grocery sales were up 4.2 per cent this month and over 12 months recorded their fastest growth since April 2014. However, it’s clear that growth derives from cost pressures from imported goods; resulting from the fall in the value of sterling.

“Our concern is inflation on essential goods is now forcing cash-strapped consumers to put off discretionary spending which exacerbates the pressure on shops.

“With a quarter of a million Scottish retail jobs it’s crucial the Scottish Government carefully considers the impact on spending and the health of the retail industry when they consider income tax rates later this year.”

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