Retail sales in Scotland experienced a mild recovery in May, though failed to keep pace with previous year’s growth due to weaker non-food sales.
- The overall UK retail sales in May showed a modest increase of 0.7% year-on-year, according to data from the British Retail Consortium and KPMG.
- A decline of 2.4% was noted in non-food sales over the three-month period to May, contrasting with a minor growth witnessed in May 2023.
- Online non-food sales performed better, with a year-on-year growth of 1.5% and an online penetration rate increase to 36.7%.
- Despite positive factors like a good bank holiday weekend, retailers face challenges from weather and consumer confidence.
In May, retail sales in Scotland managed a slight recovery, yet they were overshadowed by last year’s figures, notably amplified by the Coronation sales boost. The British Retail Consortium (BRC) reported a 0.7% year-on-year increase in total UK retail sales, a mark that falls beneath the 12-month average growth of 2.0% but slightly exceeds the 3-month average of 0.3%. Such figures reaffirm the ongoing struggles within the retail sector, despite incremental progress.
Non-food retail sales presented a more troubling picture, with a decline of 2.4% year-on-year for the three months leading up to May. This drop is steeper than the 12-month average decline of 1.7%, indicating persistent challenges in enticing consumers to spend, particularly in physical stores. In-store non-food sales dipped by 2.7% during the period, pointing towards a troubling trend that may need strategic interventions.
Conversely, online non-food sales witnessed a slight uplift of 1.5% year-on-year, showcasing the digital shift among consumers. The online penetration rate climbed to 36.7% from 35.9% in May 2023, exceeding the 12-month average of 36.1%. This shift highlights consumers’ growing preference for the convenience and variety offered by online shopping platforms, a trend likely to continue.
British Retail Consortium’s chief executive, Helen Dickinson, commented that favorable weather during a bank holiday weekend contributed positively; however, inconsistent weather for the rest of May contributed to only a modest improvement in sales figures. Linda Ellett from KPMG added that specific sectors like health, personal care, beauty, and computing fared well, with minor increases seen in women’s and children’s apparel sales. Yet, the overarching weakness in consumer confidence poses significant challenges.
Retailers hope that upcoming warmer weather, combined with consumer activities related to summer holidays and events like Euro 2024, will catalyze a resurgence in spending. The economic landscape appears to be improving, but the retail sector remains precarious, with many businesses postponing substantial investments until they perceive a definitive boost in consumer confidence.
The retail sector shows a mild recovery amid challenges, setting cautious optimism for future improvements.
