Clumsy intervention ‘could make life even harder for Scottish retailers’

Scotland’s retail sector is “at a crossroads” and the Scottish Government must ensure it does not increase retailers’ regulatory burdens and operating costs if the economy is to flourish, the Scottish Retail Consortium has warned.

In a new report, Retail: Serving Scotland’s Communities, the industry body said poor government intervention could accelerate the trends of falling footfall, store occupancy and retail employment.

It also claimed that certain areas of the country – including Dundee city and the Highlands – should be used as “canaries” for the state of the Scottish retail sector as a whole, due to their high level of public sector employment and the potential knock-on effect on in-store spending.

“Retail plays a vital part in binding our communities together,” said Scottish Retail Consortium chairman, Ken MacKenzie. “With millions of consumer visits every week, retail has a unique role delivering products and services to everyone in Scotland, while employing hundreds of thousands of people.

“With some of the most challenging market conditions for years, Scottish retailing is at a crossroads, yet remains one of our most innovative and enterprising sectors. Our new report shows the benefits of a vibrant retail sector are felt by Scottish producers and the tourist trade, among many other business services.”

Competition among retailers UK-wide has kept the price of a typical basket of goods below the UK average, the report claimed.

The group also warned that a loss of retail jobs would have significant social implications for Scotland, which has a higher level of part-time jobs in the sector – attracting people with personal reasons for being unable to work full-time – than elsewhere in the UK.

Mr MacKenzie added: “Retailers do not seek subsidies but do need help in creating new opportunities. Retail failures leave gaps on high streets and can result in substantial job losses. Government can support the sector’s efforts to flourish, to renew growth in sales of high-quality Scottish products both in shops and to new online markets, and to sustain thousands of jobs, by holding back the costs for which they are responsible, including business rates, retail levies and the burden of regulation.”

Retail remains Scotland’s largest private-sector employer, with nearly 240,000 employees, about 9 per cent of the workforce. Internet retailing north of the Border is slightly more active than elsewhere in the UK, accounting for about 9 per cent of retail online searches.

The report said: “The rise of internet retailing could represent a major opportunity to access international markets with high-quality Scottish produce, serviced by highly-skilled staff, if Scotland offers a low-cost, easy operating environment.”

Recent figures showed that retail sales of Scottish food and drink products across the UK went up by 30 per cent between 2007 and 2010, rising by more than £1.8 billion per year.

A spokesman for the Scottish Government said: “Successful businesses are essential to drive recovery and the Scottish Government is considering every dimension of public policy to ensure we support the business community wherever possible.”