Weather puts a damper on tepid Scottish retail showing

Published on Tuesday 18 August 2009 21:11

WET weather damped Scots' appetites for summer food and fine-weather fashions last month and dealt a fresh blow for hard-pressed retailers, according to industry figures released today.

Like-for-like sales in Scotland rose by just 0.6 per cent year-on-year, compared with a 1.8 per cent rise for the UK as a whole.

But Scottish total sales lifted 4.8 per cent, out-stripping the UK-wide figure of 3.6 per cent.

The results were branded as "middling" by the Scottish Retail Consortium (SRC), which compiled the data with KPMG, amid warnings that "volatility" was still high in the sector.

Food sales were up 2.1 per cent but growth was at its lowest level since April 2008, with the wet weather prompting shoppers to switch from high-margin barbecue foods and salads to cheaper "wintry" foods, such as stews and root vegetables.

Sales of sun block, hayfever remedies and cosmetics slowed as the weather turned, while fears over swine flu boosted sales of anti-bacterial products, tissues and vitamins, the SRC said.

David McCorquodale, head of retail at accountancy firm KPMG, said he was "cautious" about the outlook. "The sector is still very volatile," he said. "Over the summer, people have looked for an 'up-tick' in the economy, and there has been good news with France, Germany and Japan coming out of recession and the stock market going up.

"But the reality is that Scotland still has bad news to come from the banks, which will impact employment, and unemployment will rise further.

"People are quite rightly cautious in terms of their spending so we're not seeing a vast uplift in sales of big items."

He said Scotland's like-for-like sales growth lagging behind the UK as a whole was influenced by the school summer holidays falling later south of the Border, while the higher total sales growth figure was a result of more stores opening in Scotland in the past year.

Like-for-like growth in Scotland had remained higher than that for the UK as a whole during much of the recession but dipped below the UK in April and May, before rising above the nationwide level in June.

The consortium said sales of furniture and DIY materials received a boost last month from better news in the housing market, with discounts helping sales volumes.

But retailers still found it hard to shift big-ticket items, the SRC added, while "underlying trading remained tough".

Having bought summer clothes in June, shoppers were reluctant to spend more in July, with footwear sales also falling back after a spurt prompted by June's sunshine.

Richard Dodd, the SRC's head of media, said: "A mild but damp July produced just middling results for Scottish retail.

"Customers are still cautious about buying non-essentials. Generally, dreary weather left many thinking they didn't need more summer fashion or outdoor goods on top of what they'd already bought in previous months. But it wasn't cold or wet enough to get people buying autumn and winter things."