Princes Street, Edinburgh

RETAIL sales stagnated in August, with the picture looking slightly less bleak than that experienced in July.

The Scottish Retail Sales Monitor showed the rate of decline standing at 7.5% year on year, slightly up from July’s 8.3% drop.

Food sales significantly slowed during the month, albeit remaining in positive territory, with growth of 1.5% the lowest of the coronavirus period – excluding the effects of Easter in April 2019, which heavily distorted this April’s figure.

Non-food sales on the other hand continued their recovery in August, with an online-adjusted decline of 1.7% in the Monitor which is a partnership between the Scottish Retail Consortium and accountants KPMG.

There were conflicting forces at play for non-food, as wet weather boosted sales of autumn’s clothing ranges, but this was in part counterbalanced by the lack of tourism – particularly in Edinburgh with the absence of the Fringe Festival.

Paul Martin, head of retail at KPMG UK, said: “August’s figures reinforce the overwhelming challenges facing Scotland’s High Streets.

“With total year-on-year sales down 7.5%, the situation is improving, but incredibly modestly.

“An ongoing lack of consumer confidence, combined with local lockdowns, and a massive decline in summer tourism numbers have in summary created arguably the most difficult period Scotland’s retail sector has witnessed in modern times.

“All eyes will now be on the Autumn period. As Coronavirus cases rise and the furloughing of staff eases off, there are real fears the industry could face even greater challenges ahead.

“The focus now will be on restoring confidence, working collaboratively as a sector to drive up footfall, and reducing costs as much as possible, in the hope that we’ll see a more rapid return to growth towards the end of the year.”

David Lonsdale, director at the Scottish Retail Consortium, said: “Six months on from the start of the pandemic and the revival of retail is proving painfully slow and protracted.

“The recovery in stores witnessed over recent months petered out in August, with Scottish retail sales now having fallen for six months in a row compared to the same period last year.

“Any hopes of a return to growth, or even better a modest claw back of lost sales from the earlier part of the pandemic, will have been thwarted by this latest data.”

He said that non-food sales continued to recover buoyed by online purchases sales of larger household goods.

He added: “The past six months have been bruising for the industry, and even with the crucial Christmas trading period coming in to view the near term outlook remains uncertain.

“Much of the industry continues to suffer from a protracted weakness in demand, particularly those more reliant on the hustle and bustle of high footfall locations in our city centres and shopping malls.”