'Sliver' of growth in Scottish shop sales, SRC figures show

Shoppers are facing a "winter costs crunch", retailers have warned

Retail sales showed a "sliver" of growth in September with a real terms rise of 0.8%, according to new figures.

The data, released by the Scottish Retail Consortium (SRC) and KPMG, showed total sales were also up on the same period last year.

However, the organisations said progress had been "wiped out" by soaring inflation.

They warned customers were "battening down the hatches" ahead of a "winter costs crunch".

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The analysis, covering the five weeks from 28 August to 1 October, showed total sales in Scotland increased by 6.5% compared with September 2021. Adjusted for inflation, the year-on-year change was 0.8%.

Scottish sales rose by 4.2% on a like-for-like basis compared with September 2021.

Total food sales were 9.6% up on the previous year, while non-food sales rose by 3.9%.

Ewan MacDonald-Russell, deputy head of SRC, said sales had shown a "sliver of growth" in September.

Shoppers are cutting back amid financial pressure

He added: "Nonetheless, there are clear signs customers are battening down the hatches ahead of the expected winter costs crunch.

"Food sales fell in real terms as customers cut back on the volume of goods. With food inflation now outpacing sales, even grocery retailers are feeling the pressure as customers focus on essential items.

"Non-food sales were dominated by consumers looking for ways to reduce their energy bills. Duvets, blankets, and air fryers all did well as customers look to cut costs and prepare for winter."

The retail chief warned that retailers faced "a real challenge" over the crucial festive period.

"Government needs to keep a watchful eye on this and be prepared to take action in upcoming fiscal announcements to support retailers facing into the teeth of intense cost challenges," he said.

Tough times

Paul Martin, partner and UK head of retail at KPMG, said: "Despite Scottish retail sales growing in September, high levels of inflation wiped out signs of real terms growth, and unfortunately, tougher times are ahead.

"Consumers were more cautious last month, avoiding large ticket items as many households prepared for higher energy costs through the winter, evidenced by a spike in warm clothes purchases during September.

"With interest rates, inflation, labour, energy and cost of goods continuing to climb, retailers are heading into one of the most challenging Christmas shopping periods they have had to deal with in years.

"Consumer confidence remains low, and retailers are having to tread a very fine line between protecting their own margins and further denting confidence by passing on price rises."