BUSINESS leaders have called for a government rethink over how to encourage trade in Scotland as new figures showed that stores are now shutting at a rate of more than one a day.
A new study shows that in the first six months of the year 203 business outlets closed on Scotland' high streets compared to 140 in the previous two years - a rise of 45 per cent.
Some have placed part of the blame on a doubling of the Business Rates Large Business Supplement from 1.3p to 2.6p in the pound from April which it is claimed will cost firms £62m this year. More than a quarter, 7,500 of the 29,000 properties affected were shops.
Read more: Public sector 'will be ready' with trains bid if ScotRail operator axed
The research by accountancy firm PwC and analysts The Local Data Company showed that 116 outlets opened in the six months – an increase from 95 in 2015 but down from 133 in 2014.
Falkirk was the only area in Scotland to see more openings than closures - with four retailer units launching against three shutting.
Fashion shops saw the highest number of openings – with nine - but also the largest number of closures - with 17.
Other large numbers of closures came from banks (12) and charity shops (nine). In terms of net openings, satellite TV firms (+5), health clubs (+3) and e-cigarette vendors (+3) led the way.
The data also reveals that across multiple retailers in 500 town centres fashion shops, banks, mobile phone shops, and women’s clothing shops have been amongst the hardest hit in the first half of 2016.
Read more: Public sector 'will be ready' with trains bid if ScotRail operator axed
With the emergence of online and various other career-related portals like LinkedIn, high street recruitment agencies saw a net drop of 46 units - 29 openings against 75 closures.
David Lonsdale, director of the Scottish Retail Consortium said the Business Rates Large Business Supplement should be the same north of the border as it is in England where it remains 1.3p in the pound - half the rate in Scotland.
He said: “The spike in shop closures is deeply disappointing and comes at a time when retailers are facing significant changes in consumers’ shopping habits, little discernible growth in the total value of retail sales, and burgeoning public policy induced costs.
Indeed the relentless expansion of government-imposed costs – such as business rates, the national living wage, rising employer pension contributions and next Spring’s apprenticeship levy - is outstripping the meagre growth in consumer spending.
"The devolved administration’s new £62.4 million annual rates surcharge on medium sized and larger commercial premises affects 7,500 retail premises in Scotland and only serves to make it even more expensive to operate physical stores, including in our town centres. It’s little wonder that so many retail premises in our town centres are empty leaving gap-toothed high streets with vacant units.
Read more: Public sector 'will be ready' with trains bid if ScotRail operator axed
"With store closures likely to continue this will have profound implications for devolved public policy, particularly for employment prospects in communities more reliant on retail jobs, for the health of our town centres and for future tax revenues from business rates.
"Its why we’re calling for a far more coherent approach to policy making, where business and government as a whole in Scotland work together to deliver a joint retail industry strategy which nurtures the sector and helps it fulfil its potential over the decade ahead, and for tangible government action in the upcoming Scottish budget to reduce the costs of doing business.”
Liz Cameron, director and chief executive of the Scottish Chambers of Commerce said: "With business rate bills accelerating continuing to be based on unrealistic and out of date valuations, the Scottish Government’s decision to increase the large business supplement to a rate double that which applies in England and increasing restrictions to empty property relief, all have been adding to the cost for retailers and making Scotland a less competitive place to do business.
"If the prospects for our town centres are to improve, then the Scottish Government must act quickly to reverse this rates burden, and identify new solutions and support which will help business and encourage individuals to set up and grow."
Andy Willox, the Federation of Small Businesses' Scottish policy convenor, added:"We’ve got to think differently about these important places if we’re going to turn them around, especially in the age of the internet."
The researchers found 3,201 stores were in business in Scotland in January 2016 and by the end of June, it had dropped to 3,114.
Across the UK, 2,656 business outlets closed on Britain's high streets, a rate of 15 stores a day. The number of new openings fell to 2,153 - the lowest level since 2011.
Read more: Public sector 'will be ready' with trains bid if ScotRail operator axed
A Scottish Government spokesman said: “We have announced a new £100 million stimulus package for Scotland’s economy, in addition to our Small Business Bonus scheme, which has already saved firms more than £1 billion in total and which we are extending to lift 100,000 smaller business out of paying rates altogether.
“However, our efforts risk being undermined by the UK Government’s austerity policies – and the huge threat to Scotland’s economy from Brexit.”
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel