March 13, 2026 — Edinburgh, Scotland Scottish retail sales came to a halt in February, recording flat year-on-year growth compared to February 2025, amid warnings that Middle East conflict could worsen Scotland’s ‘costs crunch’ through higher energy and import prices. Inflation-adjusted figures showed a 1.1% year-on-year decline, following January’s 3.3% rise, according to the Scottish Retail Consortium (SRC) and KPMG.
Food sales increased 1.2% year-on-year, below the three-month average of 1.4% but above the 12-month average of 0.3%. Non-food sales dropped 1.5%, worse than the three-month average decline of 1.0% and 12-month average of 1.9%. Shopper footfall fell after January’s gains, linked to ongoing high input costs and wet weather impacts.
Economists’ Warnings on Geopolitical Risks
SRC director David Lonsdale stated:
“The costs crunch affecting households and firms remain real and could be exacerbated by prolonged conflict in the Middle East, which may make for a bumpy few months ahead.”
This echoes Warning: Middle East conflict could worsen Scotland’s ‘costs crunch’, highlighting how oil supply disruptions from regional tensions could intensify economic pressures already evident in flat sales.[1]
Lonsdale further noted:
“Scottish retail sales slowed to a halt in February… flat sales figures correlating with a fall in shopper footfall.”
KPMG’s Linda Ellett added:
“After a strong January came a disappointing February, with no sales growth overall for Scottish retailers… the combination of ongoing business costs and limited consumer spending is challenging.”
Broader Context and Regulatory Concerns
The flat performance ended a seven-month streak of modest growth, below three-month (1.2%) and 12-month (1.0%) averages. Bright spots included Valentine’s-related purchases like perfumes and jewelry, but clothing, footwear, and furniture lagged, per Deadline News coverage.
Warning: Middle East conflict could worsen Scotland’s ‘costs crunch’ is reiterated across reports, with calls for policymakers to avoid adding regulatory burdens that hinder investment in stores and price controls. Unadjusted sales were flat against February 2025’s 0.4% drop.
UK-wide trends align, with the British Retail Consortium (BRC) noting wet February dampened sales, and BRC chief Helen Dickinson warning Middle East issues “threaten knocking any recovery off course.”
This underscores Warning: Middle East conflict could worsen Scotland’s ‘costs crunch’, as escalating tensions risk higher fuel and food inflation amid Scotland’s fragile retail recovery.