Sales hit by economic climate – and rain

SCOTTISH retailers today report their worst August sales figures for three years, as shoppers turned to "value" products and cut back on non-essentials.

Like-for-like sales last month crept ahead by just 0.7 per cent according to the Scottish Retail Consortium (SRC), while total sales rose by 6.6 per cent compared with August last year, reflecting the higher price of food and other goods.

The news comes a day after two of the UK's largest supermarkets launched a fresh price war, with Asda slashing 5,000 prices and Tesco introducing 350 new "discounter" products.

Across the UK, retail sales fell 1 per cent below their August 2007 levels, while Scottish retailers reported that sales in July and August were "much weaker" than in May and June, because of "unseasonable weather and the squeeze on household budgets".

Fiona Moriarty, director of the SRC, said: "These are the worst August sales figures since 2005.

"But overall, Scottish like-for-like sales were still up year-on-year compared with falls in other parts of the UK.

"This suggests Scottish customers remain marginally more confident, and appear to be slightly less affected by rising household and energy costs, than shoppers south of the Border.

"Bright spots included return-to-school clothing and footwear, but the reality for the sector is sales rose by less than inflation and miserable weather slowed food sales growth, traditionally a strong summer performer."

The SRC said the 0.7 per cent rise in like-for-like sales was still below the level of shop-price inflation and, in real terms, sales continued to be down on 2007.

In the non-food sector, like-for-like sales decreased by 3 per cent while, in clothing, price increases helped to keep comparative sales above last year's levels but, if inflation is taken into account, sales were down.

In the food sector, like-for-like sales increased by 4.7 per cent, which was a lower increase than in the past two months.

The SRC said aggressive price promotions helped raise volumes but meant the increase in sales values was close to zero when sector-wide price increases were included.

Sales of mince and stewing steak rose as customers opted for cheaper cuts of meat, while special offers, discounts and "value ranges" were also popular.

The SRC said the weather meant salads, soft fruit and barbecue foods often gave way to soups, stews and puddings.

Research released yesterday by TNS showed discount supermarkets had gained ground. The combined market shares of Aldi, Lidl and Netto rose to 6 per cent during the past 12 weeks, up from 5.6 per cent during the same period last year.

Meanwhile, a survey by Tesco suggested that consumers were more worried about food prices today than they have been at any point in the past 20 years.