In his New Year message, David Lonsdale, Director of the Scottish Retail Consortium, said:
“As we end this year and look ahead to the next it is worth noting that there has rarely been a better time to be a shopper. Three years of falling shop prices has coincided with a technology revolution. That’s led to customers being able to choose how they get their products, at the time and place that suits, at a price in real terms which has seldom been lower.
“However, for Scotland’s retailers much of the data from 2016 - on retail sales, footfall and shop vacancies – has made for sober reading, especially against a backdrop of further shifts in shopping habits and stiff competition. This has been compounded by official figures this autumn showing a continuing drop in the numbers of shops and retail jobs. That said, the final few months of the year ended on a more upbeat note with a modest and welcome uplift in retail sales in Scotland.
“In many respects our economy lives or dies by what happens to consumer spending. That’s why policy makers should be concerned about the formidable challenges for Scottish retail in the year ahead. Rising inflation and council taxes are likely to put a strain on disposable incomes. However, households will be relieved by the Scottish Government’s decision not to increase income tax rates, an area on which the SRC and government are firmly at one.
“Retailers themselves continue to grapple with a hotchpotch of government-imposed cost pressures. This is set to continue into early 2017 when employers of scale start forking-out for the Apprenticeship Levy. This reinforces the need for government at every level to work more effectively with the retail industry to help it keep down the cost of living for consumers and to help it thrive and prosper. A more coherent approach towards policy making in the year ahead is certainly required. This will become all the more important with Scotland’s economic performance now determining to a significant extent the levels of devolved public sector revenue. That will only become more important, especially with half of VAT receipts soon to be assigned to the Holyrood Parliament. Our MSPs will have an even greater direct stake in supporting a flourishing retail industry.
“Of keen interest to the industry over the coming year will be other policy developments too, notably on Brexit and business rates and how the evolution of those debates will affect economic decision making and confidence.
“The depreciation of Sterling since the Brexit vote will challenge the ability of retailers and their supply chains to absorb higher import costs. The coming year will hopefully bring less opacity over the implications of Brexit and what it might mean for tariffs on the cost of imported goods, especially food.
“2017 will also see the culmination of the Barclay Review of Scotland’s £2.6 billion system of business rates. There are few more pressing issues for the industry than the prohibitive cost of business rates, which has moved in the eyes of many retailers from irritating to debilitating in recent years. We must make the most of this Review and recast business rates for the decade ahead and substantially lower the tax burden. This would increase retailers’ confidence about investing in new and refurbished shop premises, create jobs and help revive our high streets and town centres.”