Scottish retail sales were flat in July, rising 0.1% in nominal terms but falling 0.5% once adjusted for inflation, according to the Scottish Retail Consortium (SRC) and KPMG.

Food sales declined 1.4% year-on-year despite a boost in early July from hot weather. Non-food sales rose 1.4%, helped by demand for phones, furniture and some toys, though TV and fashion sales lagged.

SRC deputy head Ewan MacDonald-Russell said shoppers were cutting back amid rising economic uncertainty, leaving many retailers “facing higher costs without the growth needed to pay those bills.”

KPMG’s UK head of consumer, retail and leisure, Linda Ellett, said the trading environment remained “challenging” as inflation and increased employment costs squeezed margins.

She noted that while some home appliances and food sales benefited from the warm weather, big-ticket purchases remained subdued as consumers prioritised holidays over discretionary spending.