RETAIL chiefs have called for business rates in Scotland to be reformed after new figures showed sales growth lagging behind the UK as a whole.

The latest retail sales index statistics show that in the period April to June 2017, the value of sales in Scotland increased by 1.4 per cent while the overall volume of sales rose 1.1 per cent.

Compared to the same period in 2016, the volume of retail sales in Scotland was up by 1.6 per cent, while their total worth rose by 3.9 per cent – compared to increases of 2.6 per cent and 5.6 per cent in the UK respectively.

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Ewan MacDonald-Russell, head of policy at the Scottish Retail Consortium, said much of the rise in spending was a result of higher prices for food products.

With shoppers spending more of their cash on food, he warned of “tough trading” conditions on the high street.

MacDonald-Russell said: “Scottish retailers will be pleased to see the value of retail sales continue to rise across 2017. However, it’s likely much of this increase is a consequence of food price inflation.

“Over the last six months, SRC figures show that consumers have increased their spending on groceries, with a consequent reduction in non-food sales. With more money going on the weekly food shop, customers appear to have reduced their discretionary spending, leading to tough trading on the high street.

“With both retailers and consumers feeling the pinch, the onus is on the Scottish Government to prioritise economic growth in the decisions it takes over the next few months.

“Retailers will hope to see ministers supporting hard-pressed customers by keeping income tax rates at their current level, whilst taking the opportunity to reform the business rates system to make it simpler, more flexible and more competitive.”

Euan Murray, of Barclays Corporate Banking in Scotland, agreed that “strong food sales, through a combination of higher prices due to inflation and increased consumer spending, have carried quarter two retail performance”.

He said: “Although it was the wettest June in Scotland for over a century, people were still making the most of the bursts of warmer weather when they could, helping food sales. A later Easter also bolstered spending in the quarter.

“The UK tourism boom continues to have a positive effect on the retail sector. Weak sterling is delivering better value for money for our tourists and they are capitalising on that when visiting.”

Business minister Paul Wheelhouse said: “The latest Retail Sales Index for Scotland shows a rise in the volume of retail sales during the second quarter of this year, following a contraction at the beginning of 2017.

“These results are encouraging and show that the Scottish economy remains resilient in the face of a number of challenging external economic conditions, including the impact that Brexit is having on driving retail price inflation, particularly in food items, which is weighing heavily on household finances.

“This is why we continue to try to persuade the UK Government to avoid the potentially damaging path they are set upon and, instead, retain the UK’s membership of the EU single market and customs union.”