Price-conscious shoppers turn to value ranges
Scotland’s retailers are facing the “difficult truth” of consumers becoming more price conscious and cutting back on spending.
High streets reported stalled sales last month as shoppers bought fewer items and also traded down from premium to value ranges.
The Scottish Retail Consortium (SRC) reported a 1.6% year-on-year rise in total sales in May, but adjusted for inflation, sales were 1.1% down on the same period last year.
Ewan MacDonald-Russell, head of policy & external affairs at the SRC said: “Retailers are facing the difficult truth that their customers are becoming more price conscious in response to high inflation.
“Those customers are responding by reducing their discretionary spending, both by buying fewer items but also trading down from premium to value ranges.
“Government at both Holyrood and Westminster need to keep a close eye over the coming months and stand ready to take action if the situation doesn’t resolve itself soon.”
Food sales were up by 1.8% on May 2021, while the non-food category saw a rise of 1.5%.
Paul Martin, partner, UK Head of Retail at KPMG: “The sun didn’t shine for long during May, and clouds remain for Scottish retailers after a less than convincing May saw sales growth stall for the second month running.
“The rising cost of living is still top of the agenda for retailers, with consumer confidence a key factor to watch out for. Retailers will be hoping that warmer weather and a summer feel-good factor kick builds confidence amongst some shoppers – as presently overall confidence levels are lower than sales may suggest.
“It also remains to be seen what effect the Chancellor’s recent announcement to provide a universal discount on energy bills will do to confidence levels, as consumers continue to make difficult choices about how to spend their money.
“Cost and efficiency are still top of agenda for most operators, and crucially, understanding how they can protect their margins whilst remaining price competitive for consumers.”