Retail leaders praise pro-growth measures but make key demand for Scottish Budget nod

Retail industry leaders are calling on MSPs to back an “imperfect” Scottish Budget, it emerged today.

In a detailed submission sent to Holyrood, the Scottish Retail Consortium (SRC) has outlined its assessment of measures contained in the draft Scottish Budget that was delivered last month by Finance Secretary Shona Robison. The intervention from the trade body comes as MSPs are expected to vote on the Budget over the coming weeks.

The SRC’s submission to Holyrood’s finance committee touches on several areas including non-domestic rates, taxes, funding to combat retail crime and regulation.

Shoppers out and about on the streets of Glasgow - Scotland's largest retail destination. Picture: Jane Barlow

Retail is Scotland’s largest private sector employer providing some 250,000 jobs across the sector. However, it has been facing headwinds caused by changing shopping habits, the cost-of-living crisis, tougher regulations and higher taxes.

Figures last week revealed a fall in the number of people visiting Scotland’s high streets in December, rounding off a “dreich” 2024 for the retail sector. Footfall decreased by 1.5 per cent last month, compared with December 2023, according to the latest figures from the SRC and Sensormatic. Shopping centre footfall was down by an average of 2.3 per cent, though retail park footfall lifted 4.2 per cent in December.

Industry bosses said retailers were striving to trade profitably in the face of spiralling cost pressures. The SRC’s submission praises the Scottish Budget decisions to scrap the mooted business rate surtax on grocers, freeze the basic property rate, fund action to combat record levels of shop theft and rule out increases in income tax. It also welcomes the decision not to apply fair work conditionality to business rate reliefs and licences to trade.

However, the industry group notes that the Budget does not contain any measures to actually reduce the cost of running a retail business, at a time when the industry is facing a hike in employers’ national insurance contributions, announced in UK Labour’s autumn Budget. The SRC also expresses frustration over the increase in business rates for medium-sized and larger shops and the omission of rates relief for smaller stores. It argues that the failure to restore business rates parity with England for larger stores over the past four years has cost Scottish shops £32.8 million.

The submission also voices scepticism over plans to consider additional tax powers for local authorities.

David Lonsdale, director of the Scottish Retail Consortium, said: “Whilst the proposed Scottish Budget is far from perfect and has flaws, there is much in it that retailers can get behind. Robust debate and scrutiny of the Budget over the coming weeks is both right and necessary, however our hope is that ministers and MSPs can work collegiately to pass the Budget without diluting the pro-growth measures during parliamentary horse-trading. A failure to do so risks adding a thick layer of uncertainty at a challenging time for retail.”

A geographic breakdown of the latest footfall data showed that overall shopper visits in Edinburgh decreased by 1.1 per cent, year on year, while Glasgow nudged up 0.2 per cent. Total Scotland footfall across the whole of 2024 was down 2 per cent on 2023.

‘Dreich’ year for Scottish retail as shopper footfall figures across the nation revealed