Scotland's retail sales decline sparks concerns over consumer spending

In June 2025, the Scottish retail sector experienced a notable decline, contradicting the previous three months of growth. Total sales decreased by 0.4% compared to June 2024, with food sales particularly impacted, registering a 2.3% decline. This downturn occurred amidst a backdrop of rising inflation and increasing household expenses, causing consumers to become more selective with their spending. The Scottish Retail Consortium and KPMG analysis highlighted that the figures fell significantly below the three-month average increase of 1.2% and the 12-month average rise of 0.1%. Despite these bleak numbers, there were some positive developments in non-food sales, which rose by 1.1% relative to June last year, primarily driven by strong sales of home appliances and seasonal clothing. Adjusted sales figures, factoring in online shopping, revealed an even higher increase of 2.1% for non-food items. This indicates a possible shift in consumer priorities, as more households opted for experiences over product purchases. David Lonsdale, director of the SRC, underscored the impact of reduced shopper footfall during June and a shift in spending habits towards experiences like traveling and attending concerts. He mentioned the considerable pressures households are facing, including surging council tax and water bills, alongside rising shop prices, which put a damper on discretionary spending. Lonsdale expressed hope that this downturn in retail sales would be temporary, contingent upon improved economic conditions. Linda Ellett, UK head of consumer, retail and leisure at KPMG, echoed the concern, noting that while non-food sales enjoyed moderate growth due to summer promotions, a notable decline in food and drink expenses contributed to an overall negative retail performance in Scotland. Ellett is optimistic that increased consumer activity during the summer might help spur retail sales in the upcoming months, suggesting that retailers are anxiously awaiting an upward trend as summer progresses.