Scottish high street suffers sales blow as households go holidaying and gigging

Industry leaders said Scots were having to contend with a “multitude of pressures” which had led to them spending “selectively”. They expressed hope that the downturn in retail sales would prove temporary, as retailers themselves grapple with a “hotchpotch” of cost pressures of their own.

Releasing its latest sales monitor, the Scottish Retail Consortium (SRC) said total sales in Scotland had fallen by 0.8 per cent in June, compared with the same month last year and once adjusted for the effects of inflation. With inflation stripped out the year-on-year decline was 0.4 per cent.

A breakdown of the data showed that total food sales by value decreased by 2.3 per cent, compared with June 2024, while total non-food sales nudged up 1.1 per cent, year-on-year.

SRC director David Lonsdale said: “Three consecutive months of growth in Scottish retail sales unfortunately fizzled out in June. This was perhaps less than surprising after the slump in shopper footfall in June, and with households continuing to prioritise experiences, such as holidays and concert-going rather than purchases of products.

“That said, sales of gaming consoles and electric fans performed well thanks to new releases and the better weather. Meanwhile, grocery sales fell back and sales of outdoor furniture and DIY equipment slowed after a strong May.

“Households are having to contend with a multitude of pressures which is seeing them spend selectively. Council tax and water bills have soared, inflation is increasing, and shop prices have started to rise. All this is putting a dampener on disposable spending.”

Linda Ellett, UK head of consumer, retail and leisure at KPMG, which helps produce the monthly sales monitor, added: “Retailers will be hoping that the summer buying is not yet complete and that the pace picks up further in July and August as suitcases get packed and the sun hopefully keeps shining.”

The high street snapshot came after the latest Bank of Scotland UK sector tracker showed that just three out of 14 sectors monitored had witnessed output growth in June. More sectors raised their prices last month, according to the report, as every area of business continues to face cost pressures.

Nikesh Sawjani, senior UK economist at Bank of Scotland, said: “Our data shows that the growth indicated by the headline PMI [purchasing managers’ index] figures is being driven by a handful of sectors.

“Although price rises have slowed, they remain widespread. However, businesses still aren’t passing on the full extent of their own cost increases to customers as they work to continue being competitive in a challenging demand environment.”

An overall rise in the UK composite PMI in June was driven by output growth in software and services, food and drink manufacturing, and financial services, which includes insurance providers, banks and other financial services firms. The data suggests that businesses are working to remain competitive amid falls in demand.

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