Scottish sales fell 1.1% on a like-for-like basis in June compared to the same month last year when sales rose 2.2%, according to the latest report from the SRC-KPMG Scottish Retail Sales Monitor.
Total sales in June were up 1.7% on the same time last year, when they increased 6.6%.

Food sales were flat, said the report, despite a slight boost from the World Cup and some sunny weather, while clothing and footwear fell after May's sun-driven growth. Big-ticket and discretionary items were hardest hit, despite clearance sales and widespread promotions.

Homewares continued to struggle as cautious consumers concentrated on essentials, while big-ticket housing-related items remained difficult. Outdoor living, DIY and gardening showed an uplift for some on the warmer days, but the effect was short-lived as the weather cooled. For indoor products, replacements and practical items of kitchen and cookware took priority over discretionary and decorative ranges.

KPMG's head of retail in Scotland David McCorquodale said: "Scottish football fans may have welcomed the much-anticipated World Cup, but it did little to hearten retailers. Food and drink sales were flat compared to last June, but the real pinch came with non-food sales - clothing, electrical, household and home goods - showing a 2% fall.

"High street performance over the last three months paints the same picture with like-for-like sales struggling to improve against the continued backdrop of impending spending cuts in the Scottish public sector. The Scottish consumer is still erring on the side of prudence and, with VAT set to rise in January, retailers will have to work hard for the rest of the year to take advantage of a discretionary spend honeymoon."

Like-for-like sales in Scotland fell further below their year-earlier level, in contrast to slightly stronger growth in the UK, where sales were 1.2% higher than in June 2009, added the report. A sharper fall in consumer confidence in Scotland than in the UK, with more concern about public sector job cuts, made shoppers more cautious about spending.

Scottish Retail Consortium director Fiona Moriarty said: "With total Scottish sales growing at half the rate of the UK as a whole, these figures are concerning. Worries about the impact of public sector cuts on jobs and incomes are knocking consumer confidence in all parts of the UK but more so in Scotland where the public sector represents a bigger proportion of the economy.

"In June, Scottish retailers didn't benefit from the same World Cup boost or consistent periods of hot weather as those south of the border and Scottish customers continued to be cautious. Retailers will be hoping consumers' nervousness subsides over the summer and the arrival of tourists and the back-to-school season provide a lift."