Scottish retail 'hoping for less of a white-knuckle ride' in 2024 after this year's ups and downs, says SRC's David Lonsdale

Scots retail expert unveils hopes and fears for key year for sector.

Scotland’s retailers in 2024 “may need to call upon all of their muscle memory, agility, and tenacity” to help drive economic growth – with the sector hoping for “less of a white-knuckle ride” after the past year’s ups and downs, according to a key trade body leader.

David Lonsdale, director of the Scottish Retail Consortium (SRC), has, in his New Year Message published today, branded 2023 a “period of upheaval for Scotland’s retailers and the customers they serve, a continuation of the ‘perma-crisis’ of recent years”.

He said Scotland’s shopper footfall and consumer spending has faced myriad hurdles, with foot traffic to retail destinations remaining a sixth down on pre-pandemic levels, the number of empty shops up by a fifth, and retail sales growth outpaced by rising prices for most of the second half of this year.

The past year has been one of ups and downs for retail, says the SRC (file image). Picture: Jeff J Mitchell/Getty Images.

The SRC earlier this month said sales had slipped for the fifth month in a row, with the total amount by value falling 1.2 per cent in November, once adjusted for effects of inflation, year on year, and with Black Friday having proved a “damp squib” for many stores.

However, Lonsdale has now also pointed to causes for optimism, such as lower shop price inflation, and he cited the fresh leadership at the top of the Scottish Government. “[The latter] included a welcome rethink of some regulatory measures, and a hoped-for reset of the administration’s approach to how it involves business in policy-development. On the latter the jury is still out.”

Looking ahead to 2024, the SRC director said the prospects for consumer confidence and spending will be “critical”, but added that employment levels “remain high and wage growth is finally outpacing inflation, albeit higher mortgages are a drag on spending”.

He also flagged “bumper” increases in statutory costs such as wages and business rates coming down the track, and said: “Given all of this, it’s possible some well-known brands may falter or a question mark might be placed over the viability of some stores.” A recent report from insolvency firm Begbies Traynor said nearly 4,500 UK retailers were in critical financial distress.

Lonsdale also noted that 2024 will see the next UK General Election, and also marks the 25th anniversary of Scottish devolution. “MSPs have a real stake in ensuring a flourishing retail industry,” he said. “However, a worrying ad-hoc and piecemeal approach towards policy making has crept in. A more coherent and rounded approach will be needed as ministers and councils continue talks aimed at devolving greater tax powers to local government, but which business has yet to be invited to be a part of.”

He added: “The past year has been one of ups and downs for retail, and the industry is hoping for less of a white-knuckle ride over the coming 12 months. Despite the headwinds, there are grounds for cautious optimism. Next summer’s major sporting events including the Olympics and European football championships should provide a welcome fillip to retail.

“Scotland retailers have proven themselves highly adaptable, and are striving to become more customer focused, productive and fit for the future… They may need to call upon all of their muscle memory, agility, and tenacity if they are to continue to help drive forward Scotland’s economy.”