New data reveals retail sales stalled last month amid rising inflation

Scottish retail sales flatlined in July as a modest rise in their value was wiped out by the impact of record rising inflation, figures show.

The latest Scottish Retail Consortium-KPMG Scottish Retail Sales Monitor showed that total sales in Scotland increased by 4.4% compared with July 2021, when they had grown 7.4%.

This was above the three-month average increase of 3.5% and below the 12-month average growth of 15%.

However, when adjusted for inflation, the year-onyear change was 0%.

Ewan MacDonald Russell, deputy head of the Scottish Retail Consortium, said: “In real terms, Scottish retail sales flatlined in August as a modest rise in the value of sales was wiped out by the impact of record rising inflation.

“Food sales rose by 5.3% as shoppers increased their grocery budgets – but that hides the reality that customers’ pounds are buying fewer products.

“Retailers did see shoppers changing their food shopping to purchase more outdoor food to take advantage of the sunshine – but that was instead of other purchases.

“It was a similar story for high street retailers. Whilst summer clothing and items sold well, that was very much at the expense of other items. It appears customers are laser-focused on what they need at the moment when purchasing.”

The figures showed that Scottish sales last month increased by 2% on a likefor-like basis compared with July 2021, when they had increased by 6.2%.

Total food sales increased by 5.3% versus July 2021, when they had increased by 1.8%, while total non-food sales increased by 3.7% in July compared with July 2021, when they had increased by 12.1%.

Paul Martin, UK head of retail at KPMG, said: “Scottish consumers continued to spend at the tills in July, despite consumer confidence polls being at an all-time low.

“While this growth is positive, it’s likely to change as consumers arrive back from summer breaks to another energy price hike.”

Scottish consumers continued to spend at the tills in July